Loyalty and Agency Problems: Study Comparing France Tunisia – Results of the study

Loyalty and Agency Problems: Study Comparing France Tunisia - Results of the studyAfter providing a complete description of variables used, we will analyze the influence of the distribution of dividends, shareholders, managers and dissemination of relevant information on the behavior of shareholders.
A- Descriptive Statistics
Table 1 shows the means and standard deviations for each variable. The descriptive study of the various items used can get more interesting results. Indeed, from Table 1, it appears that:
*    Retention is best explained by the confidence in French companies and the printing of former shareholders in the case of Tunisian companies.
*    There is a very high level of information asymmetry in the sample Tunisia.
*In addition, shareholders leaders are better informed about the activities of the company as other shareholders, in the case of French firms (the average is 3.7).
*The problems of divergence of interest vary widely across the various indicators. There are problems related to the existence of free cash flow. The liquidity of the company are not placed in profitable projects and are used to increase the privileges of leadership. For businesses Tunisian leaders to invest in projects reported by the shareholders and generate a decline in equity values.
*Finally, the various mediating variables, we note that in the Tunisian companies, the participation of leaders in the capital is very large and they are the beneficiaries of stock option plans. A natural explanation of the high value of the mean would be that companies are mostly family.
On the other hand, we recall that French companies use a very transparent communication strategy in managing the relationship with individual shareholders. The proof is: most companies publish annual reports or on their web sites, a section on communications and relations with individual shareholders. This practice is almost non-existent in the Tunisian companies.
Recall that our research model is causal. The method of analysis of causality will be the method of structural equation that is used for large sample sizes (typically 200 to 300 observations). However, the small size of our sample does not use it. Therefore, we will have to use a correlation test Spearman rank which is specified as a non parametrique8 test. This test allowed us to test the dependence of these variables.
The development below shows the correlation coefficients obtained and the comments of the results.
B-Loyalty and agency problems
The research hypotheses are made up of several variables. To verify, we chose to estimate, first, each variable by the method of principal component analysis for the correlation matrix. Then we crossed the two scores. The choice of this method is dictated by the applicability to the variables consist of several items (Evrard, Pras and Roux, 2000). The following tables present the final results of this correlation.
H1: Dividend policy and asymmetric information
To test this hypothesis we correlated the scores of the variables in pairs (the scores of the variable information asymmetries and distributions of profits). The results of this correlation are obtained in the following tables:
i) The case of French companies correlations

Sperman’s rho Dividende Asymetrie
DividendeCorrelation Coefficient 1,000 -0.031
Sig. (2-tailed) 0.003
N 40 40
AsymetrieCorrelation Coefficient -,031 1.000
Sig. (2-tailed) 0.003
N 40 404

ii) The case of Tunisian companies correlations

Dividende Asymetrie
Spearman’s rho Dividende Correlation Coefficient 1,000 -,431
Sig. (2-tailed) ,066
N 20 19
Asymetrie Correlation Coefficient -,431 1,000
Sig. (2-tailed) ,066
N 19 19

The results of this test indicate that the dividend payout is negatively correlated with the presence of a sense of leadership information than the shareholders about the company’s business, in French companies at the 1 % and Tunisian companies at 10%. According to hypothesis H1, the distribution of dividends encourages shareholders to retain a greater extent their shares, thereby reducing information asymmetries between owners inside and outside the company and allowing it to cut costs treatment related.
H2: Managers shareholders and retention
To test this second hypothesis, we perform the same step that was used for the first hypothesis. We obtained results not significatifs10 for both companies.
We will try now, to apply the test by the correlation of each sub-sample for each variable:
i) The case of French companies correlations

Managersshareholders retention
Spearman’s rho Managersshareholders Correlation Coefficient 1,000 ,470
Sig. (2-tailed) ,002
N 40 40
retention Correlation Coefficient ,470 1,000
Sig. (2-tailed) ,002
N 40 40

In the case of the French sample, the only significant positive relationship at the 1% is variable between leaders beneficiaries of stock option plans and shareholder satisfaction. This means that, if the leader is the beneficiary of many actions, he is challenged to work in the interest of shareholders, thus increasing their confidence and increase the duration of ownership of shares, resulting in therefore, the satisfaction of the latter.
ii) The case of Tunisian companies correlations

Managersshareholders retention
Spearman’s rho Managersshareholders CorrelationCoefficient 1,000 -,461
Sig. (2-tailed) ,041
N 40 40
retention CorrelationCoefficient -,461 1,000
Sig. (2-tailed) ,041 .
N 40 40

In the case of Tunisian companies, we linked all the variables that measure the shareholders and directors of the variable length of detention of shareholders. The test between these two variables is negatively significant at 5%: in firms where managers are shareholders, the duration of the investment of investors is less than 1 year. Investors prefer an independent officer of the company’s business.

Table 1. Descriptive Statistics

Variables Mean (Sd)
French companies (N = 40) Tunisian companies (N = 20)
Increasing the length of detention of shareholders 1,4 1,7
Satisfaction 2 2,2
Confidence 2,2 2,6
The attraction of new shareholders already close to the small shareholders 2,8 1,9
Agency problems
The importance of publishing quality information to managers 2,36 1,4
The informational advantage of shareholder directors 1,3
Stocks option
Share price 1,9 2,4
Cash Investment Company 1.9
Investment projects selected 4,1 3,4
Managers shareholders
The involvement of leaders in the capital of the company 2,8 3,7
Stock option plan 2,3 3,2
Communications Policy
The importance of adopting a communication policy 1,6 1,4
Communication tools 2,3 1,1
Distribution of dividends 1,6 1,2
Dividend Growth 2,9 1,5
Degree from the importance of dividends 2,4 3,5
Tax preference for dividends 2,3 1,7