This article confronts portfolio theory, which advises widespread adoption of equity index funds, with household practice. In the wake of moves made by the financial industry to offer products in line with neoclassical portfolio theory, US households have considerably increased their take-up of equity funds over the last 30 years. They did so without simultaneously reducing their direct equity investments, which suggests investors hold a need for engagement and expression via their savings. Mutual fund companies routinely offer new products to tap into such investment motivations, but they haven't so far met the requirements of households, especially European ones. In the end, it is policies which almost force households to save into equities which have most efficiently led to a widespread adoption of equity funds, but such policies so far do not come with a noticeable increase in the engagement of households in corporate affairs.

Short piece summarizing the results in Bach, Calvet, Sodini (AER 2020) and deriving some policy implications for the French context.

Using high-frequency VAT data, we find that the corporate sales impact of the Covid-19 shock in the spring of 2020 was very heterogeneous both between and within sectors. Emergency subsidies (loan guarantees, short-time work) do target firms with the biggest sales drops, albeit not perfectly. Corporate tax cuts, on the other hand, do not provide significantly more help to firms more affected by the pandemic.

In this report, we estimate the reactivity of dividend decisions by French firms and dividend receipts by French households to the removal of a flat tax on dividends in 2013 and its reinstatement in 2018.  The flat tax removal caused a decrease in dividends so large that the tax increase generated a significant fiscal revenue loss. Firms which decided to distribute fewer dividends saw their annual earnings decrease by almost as much as the increase in retained earnings, as a result of which corporate investment was left unaffected. 

In this report, we investigate the distribution of average corporate tax rates (corporate tax payments, with and without employment and research tax credits, over EBIT) across firms and over time from 2005 to 2015 using exhaustive French tax files. Despite little variation in statutory rates in France, the degree of heterogeneity across firms is found to be very large, persistent and, while some of it can be traced to observable characteristics (size, leverage, intangibility, international openness), most of this persistent heterogeneity is left unexplained. This result suggests the current corporate tax system leads to arbitrary long-term differences in taxation across corporate taxpayers.

In this report, we use detailed ownership and fiscal French data to look into the impact of changes in the controlling owner of closely-held firms on employment, value added, and profitability. We do find that such ownership changes typically happen after substantial employment and value added growth, and improvements in profitability. Following the transfer in control, we observe a substantial mean reversion in performance, which can hardly be interpreted in a causal manner given the very large differential trends prior to the transfer. Comparatively, changes in the management of companies, which have been much more studied in the literature on family firms but are much less targeted by public policies, have a much sharper effect on performance.

French senators are under far less electoral pressure than MPs and, likely for that reason, put greater individual effort in legislative work. However, holding a local executive position has the same detrimental effect on legislative productivity among both kinds of legislators. Therefore, there are no grounds for allowing laxer restrictions on dual officeholding for senators than for MPs.

Short piece summarizing the results of my book on dual officeholding in France and updating its results based on the results of the 2012 elections for MPs.