Financing Policy and Business Cycles: Applying Organizational Theories to the French Market
Politique de financement et fluctuations économiques : une application des théoriques organisationnelles au marché français (455p.) [download]
- under supervision of professor Gérard Charreaux
- Decembre 17th, 2002 at Dijon
- [download : entete, sommaire et Résumé these]

The thesis analyzes the dynamic of financing choices from French companies between 1982 and 1997. While the previous researches have made an effort to explain the financial
structures between firms, my aim is to provide a conceptual framework, regular testability and empirical results of the financing decisions made by managers, during the business cycles.
According to the pecking order theory, the companies should favor equity capital in the financing of their investments and, in the same time, cluster their seasoned equity offering
during the economic expansions. The agency theory suggests that conflict of interests would push managers to adapt their financing decisions to the economic conditions. The dissertation builds a financing model at three levels: a macro level (the stock market), a meso level (the firm) and a micro level (the individual actors' decisions). However, the governance literature predicts, at this latter level, that manager should prefer to issue new debts during economic expansions while this policy allow them to reduce the constraints of stockholders.
Those hypotheses are confronted to reality using several and original proxies of the financing choices and panel data models on the French stock market between 1982 and 1997.
The results conclude with a dissonance of the tested theories. The primary equity issue activity on the stock market fluctuates as the business cycles. The informational effect of an equity offering depends on the current economic conditions. Nevertheless, those tests are only partial aspects of the organizational theory of financial policy. The study of the nature of external financing of French firms, that is the choice of a financial asset (bond or equity) to issue made by top managers, leads to conclude they are favoring debt during expansions. The conceptual framework and the empirical proxies of this dissertation open a way to original researches about financing policy theories using the methodology of panel data.