Mehdi Nekhili

What matters more in R&D and Capital Expenditures Financing by Japanese Firms:Multinationality or Bank Affiliation?

In this paper, we investigate the relation between cash flow, debt, investment and performance according to whether the firm is multinational (versus domestic), keiretsu (versus independent) or both multinational and keiretsu. Using a Japanese sample of 3024 firm-year observations in the period 2000 to 2002, the results shed lights on the association between financing, investment and performance in the Japanese context. First, they suggest that cash flow is the principal source of financing of both tangible and intangible investment. Second, we find that firms which are both multinational and keiretsu are the most constrained ones regarding capital investments. Finally, for both multinational and domestic firms, bank affiliation alters the relationship between R&D and performance as well as between capital investment and performance.

Free Cash Flow and the Governance of French Firms (Free Cash Flow Et Gouvernance Des Entreprises Françaises)

The limitation of the problem of free cash flow depends on the efficiency of governance mechanisms. In our study, we chose four main governance mechanisms, namely debt, the distribution of dividends, boards of directors and ownership structure. On the basis of a sample of 94 French firms in 2004, the results show that sustained distribution of dividends, a small-sized board of directors and some level of share-ownership by board members and managers are necessary conditions to the resolution of free cash flow. External directors and controlling interests act on free cash flow risk rather indirectly by favouring a massive distribution of dividends. The CEO/chairman duality produces the opposite effect. (La limitation du probleme du free cash flow depend de l`efficacite des mecanismes de gouvernance. Dans notre etude, nous avons retenu quatre principaux mecanismes de gouvernance a savoir l`endettement, la distribution de dividendes, le conseil d`administration et la structure de propriete. Sur la base d`un echantillon de 94 firmes francaises en 2004, les resultats montrent, qu`une distribution soutenue des dividendes, une taille reduite du conseil d`administration et une participation des membres du conseil et des dirigeants au capital sont des conditions necessaires a la resolution du probleme de free cash flow. Les administrateurs externes et les blocs de controle agissent plutot indirectement sur le risque du free cash flow en favorisant une distribution massive de dividendes. Le cumul des fonctions de president du conseil et de directeur general produit l`effet inverse.)