Real effects of ownership structure: impact of long-term investors on corporate policies and performance.

Summary This thesis deals with the influence of shareholders' investment horizon on firms' decisions and performance. It is composed of four articles. The first article reviews the literature and identifies gaps that the other three empirical articles seek to fill. The second article is devoted to the effect of the shareholders' investment horizon on employee satisfaction. Employee satisfaction is an intangible asset that, although it creates value in the long run, is poorly valued by the market in the short run. For this reason, long-term and short-term investors may not have the same interest in the companies they invest in satisfying their employees. The paper documents a positive effect of long-term investors on employee satisfaction and establishes causality in different ways. This result indicates that ownership structure is an important determinant of the implementation of CSR policies that create long-term value. The third paper studies the impact of shareholders' investment horizon on banks' performance during the crisis. The results of the empirical analysis show that a greater presence of short-term shareholders is associated with a greater fall in share price during the crisis. This association is partly explained by the greater risk-taking of banks with a greater presence of short-term shareholders before the crisis. It is also explained by the behavior of short-term shareholders during the crisis. The latter sold their shares massively, generating greater pressure to sell bank shares by all institutional investors. These results have implications for bank capital regulation, suggesting that the protective effect of bank capital varies with the investment horizon of the holders of the capital. The last paper focuses on the disciplinary effect of long-term investors. It shows that the disciplinary effect of long-term investors on the overinvestment of a firm depends on the length of time these investors have actually held the firm's shares. The results of the empirical analysis support the idea that, in order to build a shareholder base that generates more value, attracting long-term investors is not enough, firms should also induce their shareholders to hold their shares longer.