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Le profit contre la croissance? Le dynamisme et la rentabilité des grandes entreprises cotées en France

Author

Listed:
  • Yann Guy

    (GERME - Groupe d'Etudes sur la Régulation et les Mutations des Economies - UPD7 - Université Paris Diderot - Paris 7)

  • Renaud Du Tertre

    (GERME - Groupe d'Etudes sur la Régulation et les Mutations des Economies - UPD7 - Université Paris Diderot - Paris 7)

Abstract

The increasing profits of large companies have sparked off fierce debates these past few years. Many pundits believe that extravagant dividend distribution and share redemption policies benefiting only the shareholders are likely to jeopardise investments and therefore business growth. The performance analysis of major groups listed on the French market strongly moderates this point of view. While shareholders have largely benefited from the profit distribution process, this is mostly to the detriment of creditors without really threatening free cash flow. Company management teams are looking to combine the short-term and long-term interests of their shareholders, the former relating to profit redistribution and the latter to business growth. The profitability constraint weighs heaviest on investment, notably via the leverage effect based on a gap between the economic return on capital and the long-term interest rate. In this context, the subprime crisis is likely to penalise investment even more and eventually the economic growth of large companies.

Suggested Citation

  • Yann Guy & Renaud Du Tertre, 2008. "Le profit contre la croissance? Le dynamisme et la rentabilité des grandes entreprises cotées en France," Post-Print hal-00560943, HAL.
    • Handle: RePEc:hal:journl:hal-00560943
    as

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