The Case of France

This chapter investigates the influence of political connections on corporate performance among 223 French industrial firms listed on Euronext Paris between 1998 and 2010. It contextualizes the empirical analysis within France’s evolving political landscape, marked by ideological shifts, presidential reforms, and intermittent economic crises. Drawing on original datasets that identify companies connected through top officers, large shareholders, or both, the study explores how political affiliations affect market power and operational efficiency. Findings indicate that French politically connected firms do have significantly greater market power, particularly when ties are established through top corporate officers. However, these connections also correlate with lower productivity, suggesting potential trade-offs between influence and performance. Unlike some international evidence, the French case underscores the nuanced impact of institutional design and industrial policy on the corporate benefits of political ties. This chapter offers a compelling assessment of how political connections manifest within a developed Western democracy, revealing the structural conditions under which such ties confer advantages or impose costs. Readers will gain empirical insights into the complex intersection of politics and business in France and the broader implications for governance, competition, and policy design.