Country of Origin Effects and New Financial Actors: Private Equity Investment and Work and Employment Practices of French Firms

Abstract

This is a study of the effects of alternative investors on a range of work and employment practices in France, paying specific attention to whether investors are indigenous or not. We use data from a detailed survey of French firms, and set our research in the context of the literature on comparative capitalisms. We find that private equity (PE) investments from abroad are associated with greater job insecurity, less spending on training and lower wages, but French PE investments are not. We explore the reasons behind this variation and the implications for theory and practice.

Family Offices and Institutional Change in Europe: A Comparative Analysis

“…Articles expressed the suspicion that these close ties had facilitated tax evasion on a large scale. Stevenot, Guery, Wood, and Brewster (2018) who report links between the state and finance in the related area of private equity, corroborate our findings.…”

Entrepreneurial Finance and HRM Practices in Small Firms

“…This framework contributes to the important research area of how HRM practices are influenced by firm growth (Avetisyan et al ., 2020; Bacon and Hoque, 2005; Bacon, Wright and Demina, 2004), with a particular focus on small, entrepreneurial firms (Cardon and Stevens, 2004; Sheehan, 2014). Previous literature on the influence of external financing on HRM practices identifies changes to employment (Bacon et al ., 2013), training (Bacon et al ., 2007) and compensation (Wright et al ., 2007), yet these are most common in more established, larger firms (Guery et al ., 2017; Stevenot et al ., 2018), with a single source of financing (Wood and Wright, 2009) or with aspects of growth other than changes in HRM practices (Jelic, Zhou, and Wright, 2019; Kuvandikov, Pendleton and Higgins, 2020). This research contributes a more nuanced, empirical explanation of how small, entrepreneurial firms approach HRM in light of the institutional logic of external investors.…”

“…Focusing on Irish agrifood firms provides a new perspective in the field of entrepreneurial finance, which mostly focuses on high‐technology companies (Colombo and Grilli, 2010; Fisher et al ., 2017; Pahnke, Katila and Eisenhardt, 2015). Future research can build on our findings, specifically in their analysis of entrepreneurial finance and HRM practices across other sectors, and more specifically looking at international differences in entrepreneurial finance, for instance across the United States and the European Union (Bacon et al ., 2012; Guery et al ., 2017; Stevenot et al ., 2018). Moreover, empirical testing can identify much more causal relationships and generate specific insights into the effect of one form of investment over another.…”

“…Similarly, these transactions improve firms’ internal training and workforce capabilities, including merit‐based hiring and promotions practices (Bacon et al ., 2007). Moreover, investors are found to be very heterogeneous, in terms of their objectives and logic, and these different logics may impact HRM practices in their investee firms (Guery et al ., 2017; Stevenot et al ., 2018). As this research was largely conducted in more established, larger firms, there is a call for greater insights into the science and practice of HRM in small, growing firms (Huselid, 2003; Mayson and Barrett, 2006), and the impact of investment on this process (Burton et al ., 2019; Gilbert, McDougall and Audretsch, 2006).…”

“…We examine this research question through case study analysis of seven small founder‐led Irish firms operating in the agrifood industry, a €13.7 billion industry primarily focused on exports from small to medium‐sized businesses (DFAM, 2019). Extant research on the impact of external finance on HRM has mainly focused on firms operating in sectors such as technology, retail and construction (Guery et al ., 2017; Stevenot et al ., 2018; Wood and Wright, 2009). Firms in the agrifood sector often grow and internationalize at a slower pace, but despite its nuanced strategic initiatives and business model orientation, the agrifood industry remains an under‐researched industry (Brenes, Ciravegna and Marcotte, 2016).…”