Pierre-Éric Mounier-Kuhn

Maël Pégny
email: maelpegny@gmail.com

AFCAL and the Emergence of Computer Science in France: 1957-1967

Founded in 1957, the Association Française de Calcul (AF-CAL) was the first French society dedicated mainly to numerical computation. Its rapid growth and amalgamation with sister societies in related fields (Operations Research, Automatic Control) in the 1960s resulted in changes of its name and purpose, including the invention and adoption of the term informatique in 1962-1964, then of the adoption of cybernétique in 1967. Our paper aims at explicating the motives of its creation, its evolving definition and the functions it fulfilled. We seek to understand how this association, altogether a learned and a professional society, contributed to the emergence and recognition of Computing as an academic discipline in France. The main sources are the scattered surviving records of AFCAL, conserved in the archives of the Observatoire de Paris, of the

Introduction

The Association Française de Calcul (AFCAL) was founded in 1957 by French academics and industry engineers who wanted to join forces, to form a specialist community promoting applied mathematics and computing technologies in the context of the post-war modernization. With this technoscientific and political agenda, the new society soon attracted hundreds of members and support from various organizations.

It would be anachronistic to retrospectively tag AFCAL as a champion of "computer science". It focused initially on numerical analysis, a sub-discipline of applied mathematics, and on the use of calculating machines. The idea that electronic computers and their programs could become a new, distinct scientific academic field did not emerge until the 1960s. One of the main questions addressed in this paper is precisely how AFCAL participated in this emergence: what convergence of agenda and which internal tensions came to shape digital computation as a new academic discipline3 .

The archives of the association disappeared accidentally in a flood in the 1980s, making our research a bit difficult. The main sources are scattered surviving records of AFCAL, conserved in a variety of institutions: the archives of the Observatoire de Paris keep a box of papers from AFCAL's early years 4 , those of the Institut de Mathématiques appliquées de Grenoble and of the CNRS Institut Blaise Pascal in Paris contain correspondences and reports exchanged between founding members. There are certainly more records waiting to be discovered in other organizations or with private persons. Published sources include AFCAL journal Chiffres (from 1958) and its conferences (from 1960). Finally, the first meeting on the history of computing in France included several papers addressing the evolution of French societies in this field 5 .

In this sketch of our paper6 , we will highlight three episodes of the association's beginnings: the circumstances and motives of its creation; its participation to the international congress ICIPS and the international association IFIP; the functions of the association and their evolutions. In this last part, we will examine the role of the association in the emergence of informatique as a new scientific discipline.

The Emergence of a Computing Community

While the French academic spheres in the post-war period were dominated by pure mathematics, a growing demand for applied mathematics was expressed by physicists, and by various branches of engineering. From the late 1940s on, several young university professors responded to this demand by creating courses in numerical analysis and computing laboratories (Mounier-Kuhn 2012). In the early 1950s, electronic calculators were acquired from manufacturers and installed in these laboratories or, on a larger scale, in big organizations such as Électricité de France (E.D.F.) and aeronautics companies. In 1955, the first stored-program computers entered service in France, considerably reinforcing these facilities and offering new perspectives to mathematical modeling as well as to data processing.

Within two years, a series of learned societies were founded in related fields, a veritable blooming of professional communities active in Operations Research (SOFRO), Automatic Control (AFRA), Measure and Regulation (AFIC) and Computing (AFCAL). Simultaneously, scientists with political connections established a governmental council, CSRSPT (Conseil supérieur de la recherche scientifique et du progrès technique), in order to support the modernization of research and higher education. This body identified automatic control, applied mathematics and computing as a priority sector, under the label Cybernétique.

Technoscientific Networking: Applied Mathematics as a Modernization Tool

One of the main actors of this movement was Jean Kuntzmann, an algebraist turned militant of applied mathematics, who had created a small laboratory of numerical analysis at the university of Grenoble to meet the needs of the local Institut Polytechnique7 . His correspondance reveals his role as the initiator of the creation of AFCAL and sheds light on his motivations. Kuntzmann's action to foster useful mathematics was supported by the local academic authorities and by the Ministry of Education which favored initiatives toward vocational studies. Most of the financial resources of his laboratory came from contracts with civilian or military clients who appreciated his expertise and, in turn, brought stimulating problems. The synergy between funding, research, teaching and practical computing generated a cumulative growth process. In the mid-1950s, Kuntzmann was recognized in France and abroad as a leading specialist in his field. He was consulted by junior professors who wanted to set up their own computing laboratories (in Lille, Nancy, Barcelona and other universities). His laboratory attracted visiting teachers and doctoral students.

Having systematically informed the major French users about the services his laboratory could provide, and received acknowledgements of their interest, Kuntzmann had built an interactive network of colleagues and partners. In April 1956, he began contacting other French specialists to suggest an association.

His correspondents, men of his generation or younger engineers and professors, shared his project and responded positively. This first poll allowed Kuntzmann to solicit and obtain the patronage of academic notabilities at a higher hierarchical level, the dean of the Paris faculty of science and the director of Institut Henri Poincaré8 . He did not explain his purpose in detail, as these men obviously knew the usefulness of a learned society: Kuntzmann's correspondence contains no negative answer, not a single letter from a colleague objecting to his project.

Already a member of several learned societies, Kuntzmann had a precise idea of the one he wanted to create. He belonged to the Société française de mathématiques, which was still too general-purpose and exclusively academic to be of real use in his project. He also participated in the International Association for Analogue Calculation, which by contrast covered only part of the domain. The closest model was the American Association for Computing Machinery (ACM) with its specialized journal, to which Kuntzmann subscribed.

In Spring 1956, Kuntzmann also became a member of the German Gesellschaft für Angewandte Mathematik und Mechanik (GAMM). Kuntzmann could not attend the inauguration of the PERM computer in May 1956, but, always keen on completing his documentation on the state of the art, the Grenoblois ordered the proceedings of the important Darmstadt conference held the previous year 9 . The GAMM existed since the 1920s and, with its institutional weight, could be a model of what Kuntzmann and his partners wanted to create in France, where no learned society existed in applied mathematics until 1955.

It is revealing that Kuntzmann aimed to create a new society rather than join the cybernetician community, which had been popular since Norbert Wiener's manifesto in 1948, and which possessed its own organization. While Kuntzmann sent one of his doctoral students at the International Congress of Cybernetics (Namur, Belgium, 1956) and ordered its proceedings, he explained in a harsh letter why he refused to join the Association Internationale de Cybernétique: "I have always thought that the grandiose term of Cybernetics covers very diverse matters. Some are mathematical, others are technical. Unfortunately, on top of that comes some philosophy, and even certainly babble (fumisterie). Either Cybernetics shall fall into oblivion or, some day, one will have to separate what is robust from what is not. I reserve my adhesion (and my participation in meetings) for the moment when this decantation is achieved10 ."

We know that this rejection of Cybernetics, or of what it had become in the mid-1950s, was shared by other French computing pioneers. They believed Cybernetics could not provide the identity of their emerging profession.

Kuntzmann knew that an informal group existed already in Paris, gathering periodically a handful of specialists and distinguished amateurs in a seminar on numerical calculation. Somehow its lack of institutional strategy and of scientific ambition reflected the low status of reckoning in the past decades. Kuntzmann courteously suggested to integrate the group in his future association to broaden its scale and scope. The merger was completed swiftly at a meeting in Paris, during a conference on scientific management. It avoided a possible conflict and brought a mailing list of 200 corresponding members to the nascent AF-CAL11 . The Groupe de Calcul Numérique held its seminars at the Paris Institut d'Astrophysique, and the AFCAL naturally followed suit, obtaining an office and a mailbox in this convenient venue. More importantly, the director of the Institut d'Astrophysique, André Danjon, an energetic and open-minded astronomer, agreed to become AFCAL's first president, bringing his own legitimacy and political connections.

Danjon had sent his young astronomers to learn programming on the IBM650 computer at IBM France, and was aware of the potential of the new machines. Beyond the technical importance of calculation in science, we can suggest the hypothesis of a solidarity between emerging disciplines. Just like computing in the years to come, astrophysics had had to assert its legitimacy against the conservatism of traditional astronomy, which was entirely mathematical and had reasons to view astrophysics as an uncertain science, lacking rigor, perhaps not a science at all: "Basically [for them], astrophysics could not be considered a science" ( À l'extrême, l'astrophysique ne pouvait être considérée comme une science12 ). Under Danjon's tutelage, AFCAL had two vice-presidents: Prof. Jean-André Ville, a mathematician who had just been put in charge of a computing center at the Paris faculty of science; and Jean Carteron, a Polytechnique engineer who headed the computing center at the R&D Department within E.D.F., and was equally active in founding the association (EDF sponsored AFCAL generously) (Mounier-Kuhn 2010b). Kuntzmann reserved for himself the responsibility of the future journal, a position of scientific gate-keeper in the new field.

Kuntzmann's work to promote modern theories and practices in applied mathematics was in synergy with the efforts of the computer industry to market their machines and their applications, and with the need of mathematical modeling among users. The lists of AFCAL members (200 in 1957, some 500 six years later) and of the institutions where they worked offer a fairly complete picture of French applied mathematics13 : higher education and research, laboratories of major public or private companies, computer makers, consultants in mathematical and programming expertise. These various specialists felt the need to share their experiences and to promote their methods, which was the primary function of the association. It took nearly a year to create the association, as each founding member had many other urgent tasks. The constitutive assembly (May 31 1957), beyond adopting the charter, heard lectures on the present computing needs and resources among users, on recent machines' capabilities, and on the search for better programming methods that AFCAL should foster, a program covering most of the purposes of the association.

In June 1957, Kuntzmann set to create its journal, Chiffres, that is to find a suitable publisher and to hunt for good papers. The journal would also include sections devoted to scientific news, the announcement of courses and seminars, reviews of books and of conferences... In October, Carteron urged Kuntzmann to "give life as soon as possible to the Association" by organizing meetings, and both men gave it all the publicity they could in France and abroad. By November, Kuntzmann had formed an editorial board and gathered sufficient material for a first issue of Chiffres.

From its very beginning on, the association had an international dimension. Firstly, its membership soon included mathematicians working in Switzerland (Charles Blanc, Pierre Banderet, etc.), in Italy (particularly at the Olivetti-Bull joint venture) and in Belgium (Vitold Belevitch, Jacques Burniat). About 10% of AFCAL members in the early 1960s worked outside of France 14 . Its audience still remained limited to French-speaking countries or readers, as its publications provided initially no English abstracts.

2 Creating an Internationale of Computing: IFIP and its Scientific Agenda

Soon after its creation, the association contributed to establish an internationale of computing specialists. In December 1957, AFCAL was contacted by an American engineer and entrepreneur, Isaac L. Auerbach. As a member of the US Association for Computing Machinery (ACM), he planned to come to Paris in order to organize an international meeting of Information Processing societies from different countries. Isaac Auerbach had just left the Burroughs Corporation to form his own consultant company. Establishing international contacts to help Auerbach Associates conduct market surveys was certainly an incentive. Yet the main rationale for this internationalization was, as in other learned societies, to exchange information and gain political weight collectively.

The French reacted positively and agreed to meet with Auerbach and to cooperate for the preparation of the conference15 . Just as in the creation process of AFCAL, the movement to join forces and cooperate appears to have been quite smooth: it was somewhat obvious to all actors, and it hardly needed more explanation than a few words in a letter. In June 1958, in Paris again, an ad-hoc committee gathered computer experts from most developed countries to organize the conference.

The International Conference of Information Processing Societies (ICIPS) met in June 1959 at the UNESCO building in Paris, gathering some 1800 participants from 38 countries during a week. For many French scientists, it was the first opportunity to hear foreign scholars (particularly Americans) present their work, and to discover the state of the art in programming techniques and in non-numerical applications of computers, an important milestone in their evolution towards research in computer science. Beside processor architecture or computing and coding methods, sessions were devoted to machine translation, pattern recognition, machine learning or future perspectives in computing. This diffusion of information was precisely the purpose pursued by Isaac Auerbach and Pierre Auger, the physicist who headed the French delegation at Unesco16 .

The ICIPS conference gave birth to the International Federation for Information Processing (IFIP) (see I.L. Auerbach 1986 and J. [START_REF] Carteron | Memories of Bygone Times[END_REF]. From then on, IFIP set up a similar worldwide conference every three years in a major city (Munich in 1962, New York in 1965, etc.). The mere existence of this global learned society and of its conferences, comparable with those in astronomy or geophysics, contributed to establish a scientific status for information processing. Such a status was explicitly targeted since its creation, as highlighted by the general secretary of the 1959 conference, Pierre Auger: "It is absolutely indispensable to have an international organization to respond to the needs of the science of Information Processing17 ".

Moreover, in subsequent years the IFIP created specific committees on specific problems: Software theory and practice, Algorithmic languages and calculi, Formal description of programming concepts, Programming languages, Programming methodology. IFIP thus not only constituted an international computing community, it also provided it with a scientific roadmap of research directions.

Being essentially French-speaking was not a serious handicap for the association, at a time when many mathematicians could at least read French as well as German. The association was thus part, from its beginnings, of an international family of sister societies with which it actively interacted. J. Carteron became IFIP's treasurer and general secretary. AFCAL members participated in the various IFIP committees and working groups, discussing research and education problems and drawing inspiration from foreign experiences (Mounier-Kuhn 2014).

3 Tensions Over a New Discipline

Applied Mathematics vs. Data Processing?

Operations research was excluded from AFCAL's scope, as it already had its own society. So was all work exclusively related to hardware, which belonged to the Société Française des Electriciens, the French member of IEEE, and could be published in a new journal, Automatisme. As for data processing, it was a set of office techniques remote from any scientific formalization. The association constituted the study of computation as a specific, hierarchized object, where calculating machines were scientific instruments applying branches of mathematics.

Since the very beginning of AFCAL, however, a tension had appeared between two conceptions of its scope: one centered on applied mathematics, the other pushing to include data processing. And of course this would grow along with the progressive diversification of the society in the following decade. In 1957 already, Carteron had written a letter to president Danjon on the definition of AFCAL's domains. Carteron recommended not to separate numerical computing and information processing: "For example, problems of sorting on magnetic tapes, or of machine translation of language, are part of our preoccupations, as well as the technical aspects of automatic data processing problems 18 ". The fact that he mentioned these particular problems reveals that he was remarkably aware of recent research directions. There was also a sociological rationale in his proposal: with the advent of electronic computers, data processing would soon become too complex for traditional punch-card technicians; it would require engineers trained at a higher level, who could be eligible among the advanced elite of AFCAL members.

At the other end of the spectrum, Kuntzmann, like other academic numerical analysts, wanted to involve the association in militantism for a reform of mathematical education, in order to give more room to applied mathematics. In several letters and reports, he advocated for a restructuring of mathematical categories, which would acknowledge the importance of "algorithmic mathematics". Even if he was soon to include a machine translation team in his institute, and courses on data-processing techniques in its curriculum, his priority always remained applied mathematics. Even decades later he kept considering informatique a technical application of mathematics.

In 1960, this debate became a central topic at AFCAL's annual assembly. The members who wanted to broaden the association's scope to data processing were led by Jean Carteron, Henri Boucher, a computer pioneer in the French Ministry of Defence, and Philippe Dreyfus, then a sort of sales evangelist for Bull computers who had already an international reputation. They succeeded in adding to the association's name the initials "TI" (traitement de l'information). Thus renamed, AFCALTI asserted the unity of a field broadened beyond applied mathematics, precisely at the time when it organized a joint conference with SOFRO (Operations Research) and the French chapter of The Institute of Management Sciences (TIMS). This change was still consolidated as Carteron was elected president as successor to Danjon. The journal's title became Chiffres-Revue française de traitement de l'information.

Toward a New Scientific Discipline

At the 1962 annual assembly, a neologism, informatique, was defined by Philippe Dreyfus and Robert Lattès as the"technique of the logical and automatic processing of information, the support of human knowledge and communication" (see Ph. [START_REF] Dreyfus | L'informatique, Chiffres-RFTI[END_REF]. Note that various attempts had already been made to name the computer field, including Informatik in Germany as early as in 1957. Ph. Dreyfus later explained the invention of informatique by the simple need he felt to name his professional occupation, encompassing all types of applications of electronic computers 19 . But there was another reason: Dreyfus had just left Bull to create a software and service bureau firm, in partnership with Robert Lattès, a brilliant mathematician who worked simultaneously for the French atomic energy authority (Commissariat à l' Énergie Atomique) and for a mathematical consultancy firm, SEMA. Informatique was the brand name of their company, just as, at the same time across the Atlantic, Walter Bauer founded Informatics Inc.

According to the president of AFCALTI, Carteron, informatique covered "all disciplines covered by calculation and information processing, from the logical design of computers to numerical analysis through machine translation." (see [START_REF] Carteron | Du Calcul à l'Informatique et à la recherche opérationnelle[END_REF]) Defined as a "technique" in 1962, informatique thus evolved into a set of "disciplines".

A further step was taken in the proceedings of the third congress of the association (CNRS, 1963). In the brief introduction, the editors asserted that programming was no longer a mere means to communicate with the machine, but that it turned into "a science of languages extending from algebra to decision theory", allowing to define "the modes of expression as well as the construction of compilers [...]. Finally, considerations about logic allowed to monitor the evolution of ideas concerning theoretical informatique ". Science, informatique théorique: these bold assertions were thus launched, with no explanatory development, likely to stimulate the discussion and to accelerate an evolution.

It is also a good case for a geography of science. The fact that this happened in Toulouse is not irrelevant. None in Grenoble would have written such provoking phrases under Kuntzmann's direction. The Toulouse computer scientists, by contrast, were mainly physicists, engineers or applied mathematicians coming from marginal positions. Contrary to Kuntzmann, they did not worry about their mathematical legitimacy, and felt more free to embrace a new academic identity. The next year, Dreyfus and Lattès hammered their message again. Aiming at a broader readership than AFCALTI members, they chose Le Monde to publish an article-manifesto: "A new discipline: Informatique"(Lattès and [START_REF] Dreyfus | L'homme et les calculatrices électroniques. Une discipline neuve : l'informatique[END_REF]. The context was favourable: several French universities had already created specialized degrees, IBM had just launched its "third generation" computers, operating systems were now a central issue for computer scientists, and the takeover of the french company Bull by General Electric had triggered reactions in industry and government spheres.

The headlines described informatique as a broad set of sciences and techniques, reflecting the variety of AFCALTI's interests. Then Dreyfus and Lattès recalled their definition of 1962, but assertively added a much more scientific dimension: "More than a simple technique, computing is a discipline, a scienceinterface (une science-carrefour ) covering a large and disparate sector as much technical as scientific; it is also a mental attitude in approaching problems. " They insisted that computing had become a fully-fledged research sector, with specific matters of its own "such as software and certain technologies". In conclusion the article stressed the growing importance of computing for society and economy, which required its integration in all parts of higher education and executive training, "to raise generations of men adapted to the mode of thought now required by the machine."

By that time, informatique was being gradually adopted in French common vocabulary, coexisting with other terms, and triggering discussions (within and outside the association) about its content, its meaning, its position between science and technology. The controversy opposed mainly those who thought in terms of applied mathematics and those who asserted the central place now occupied by computers in different activities. Branch or application of mathematics? Or technique, or even science of computers ? or of information? The initial definition given in 1962 was tentative, and anyone was entitled to pro-pose variants of it. This debate would eventually continue over several decades, drawing a dividing line within academic spheres, and shaping its institutional organisation.

The Evolving Functions of the Association and the Institutionalization of Computing

Finally, we examine how the definition of the functions of the association evolved over time, and draw lessons on the emergence of Computing as a new professional field in France.

The association had multiple functions from the start. Its founders knew that their field and its economic impact were growing fast. One of their initial goals was to increase awareness of the potential applications of computation among institutional actors; some members such as J. Kuntzmann also wanted to involve the association in their campaign for a reform of mathematical education, which would give more room to applied mathematics and numerical computation.

But the association was initially dominated by academics and engineers, and its primary goal was research. A key issue in the definition of its function was thus the definition of its scientific object. This definition underwent important, and somewhat tortuous evolutions during its first ten years. In the beginning, it was dedicated to computation, its methods and the relevant mathematical developments. Analog computation was not excluded, but numerical computation was central.

But as we have seen (section 3.1), as computing applications kept growing, a more applied point of view gained traction within the association, and it became more and more inclusive. This expansion was justified by the common interests shared by the different specialists, and by the extremely rapid growth of computer applications. This rate of growth helps to explain the frantic pace of institutional evolution, as the association underwent three amalgamations in less than a decade.

If the term "amalgamation" is adequate at an institutional level, it is nevertheless misleading at the level of research practices. The series of institutional amalgamations did not erase the differences between the various intellectual traditions involved. Considering its scientific object, the evolution of the association might be better described as a movement of "expansion-subdivision". In its March-April 1967 issue, the Chiffres journal was divided in two collections, one for theory and methodology, the other for practice. In 1968 it was further divided into three different collections: mathematics, computer science, operations research. In the 70s, the subdivision process continued, as the association itself was subdivided into subsections and work groups [START_REF] Brygoo | L'AFCET et l'informatique à travers les éditoriaux des bulletins[END_REF]. The association was thus a place where different subdisciplines would interact, not a melting pot where those subdisciplines would lose their original identities.

The association general assembly, and Chiffres were also places where informatique was proposed and discussed as a disciplinary term. Less successful neologisms, such as the 'economic cybernetics' (cybernétique économique), reveal the fluidity of the new professional domain, and the efforts made to cope with it. As Y. Gingras 1991 put it, scientific associations are a privileged place for specialists of a given domain to articulate a discourse on their activity and intellectual identity, both for themselves and for outsiders. Terminological innovation is thus a way to define and defend the identity of a new group of specialists. The association was thus one of the institutions where the professional identity of informaticien emerged.

To conclude, let us use this story to test the idea that the creation of scientific associations can be a criterium for the emergence of new disciplines. When it was renamed AFIRO, the association was a scientific institution at least including computer science as part of its object. According to this criterium, it played a part in the institutionalization of computer science. But a couple of remarks should be made in order to understand more precisely this institutionalization process. We must distinguish between disciplines qua intellectual tradition and disciplines qua institution. As J. Gayon 2015 remarked, an intellectual tradition like evolutionary theory could exist for decades without being institutionalized, and natural history is still an academic institution without being an autonomous intellectual tradition anymore. Furthermore, for an association to be the institutionalization of intellectual tradition X, the intellectual tradition X has to be identified as such by actors. In a typical scenario, an intellectual tradition would be formed before it would be equipped with institutions such as scientific societies.

But at the beginning of the AFCAL, it was not obvious that computation, even if its fast development demanded an institutional response, would represent a distinct intellectual tradition, other than just a branch of applied mathematics. Second, even when the intellectual tradition of computer science started to emerge, it did not lead the association to focus exclusively on computer sciencequite the contrary. The word informatique was included in its title precisely when the scope of the association was broadened to include recherche opérationnelle (operations research), then automatics and control. The association thus defined and covered a much broader field of expertise and applications than the academic discipline of computer science in France would in the near future, since Operations Research and Automatics have autonomous academic institutionalizations outside of computer science departments.

Far from being just an institutionalization of an already existing academic tradition, the association was a forum where, through collaborative work, tensions over agenda and terminological debate, the conscience of the existence of a new discipline, computer science, was going to emerge. Using the existence of the association as a static criterium for the institutionalization of an academic tradition masks its dynamic role in the very constitution of this intellectual tradition.

Conclusion

The creation of the AFCAL, and much of its evolution, was application driven. The huge expansion of computer applications in the first years of its existence is the driving force behind the growth of its membership, and the fluidity of its scope. It can be also seen as a decisive factor in the definition of the various association functions. Spreading the knowledge about potential applications of the new technologies among institutional actors, reforming the mathematical education, gathering specialists coming from different domains around a new research object: all these actions can be understood as a fast institutional response to a rapidly evolving field of high socio-economical impact.

This question is addressed in a broader scope in Mounier-Kuhn 2010a.

Archives de l'Observatoire de Paris, Ms 1061 II-2-D.

See the papers by Anne Brygoo, Jean Carteron, Colette Hoffsaës and Félix Paoletti in the proceedings of Colloque sur l'histoire de l'informatique enFrance, 1988.

The present text is only a provisional account of a work in progress, and should not be quoted without the authors' permission.

Our choice of J. Kuntzmann as a key actor is based on his role as a science entrepreneur and the availability of his correspondence conserved at the Archives départementales de l'Isère (Grenoble), henceforth ADI.

8 J. Kuntzmann's letters to J. Pérès and R.Darmois, May 3 1956 (ADI IMAG 4).

J. Kuntzmann's letters to J. Heinhold, TH München, June 5 1956 (ADI IMAG 4). On the Darmstadt conference, see[START_REF] Petzold | Eine Informatiktagung vor der Gründung der Informatik: Die Darmstädter Konferenz von 1955[END_REF]

J. Kuntzmann's letter to AIC, October 2 1956 (ADI IMAG 4).

J. Kuntzmann's letter to É. de Lacroix de Lavalette,May 4 1956 (ADI IMAG 4); and É. de Lacroix de Lavalette's historical report on his Groupe de calcul numérique, 1995. Private archives of the first author.

Evry Schatzmann's interview with J.-F. Picard, February 24 1987.

Annuaire 1963 de l'AFCALTI. Archives privées de J. Carteron.

Correspondence between I. Auerbach, A. Danjon, J. Carteron, J. Kuntzmann and J. Ville, December 7-12 1957 (ADI IMAG 5) and Archives de l'Observatoire de Paris, Ms 1061 II-2-D.

The 600 pages proceedings were published by the UNESCO both inParis (1960) and London (1960). Pierre Auger happened to coin the term Traitement de l'information, translated from "Information processing". The journal of the congress can be found at http://unesdoc.unesco.org/images/0015/001537/153718fb.pdf.

Journal du Congrès, No.6, p.2 (italics ours).

J. Carteron's letter to A. Danjon, December 6

(Archives de l'Observatoire de Paris, Ms 1061 II-2-D).


Céline Du Boys

GOVERNMENT AS A SHAREHOLDER IN LISTED COMPANIES: CONSEQUENCES ON PERFORMANCE, GOVERNANCE AND REPARTITION OF POWER BETWEEN STAKEHOLDERS

Keywords: Etat Actionnaire, Gouvernance, Performance, Répartition Valeur Government as a shareholder, Governance, Performance, Repartition of Value

L'Etat Actionnaire : Performance, gouvernance et répartition du pouvoir entre stakeholders dans les sociétés cotées détenues par l'Etat

Résumé:

Cet article étudie les conséquences de l'actionnariat de l'Etat sur la performance, la structure de gouvernance et les objectifs des entreprises cotées. A travers une étude empirique, cette recherche compare les entreprises détenues partiellement par l'Etat français à des entreprises privées de même taille et secteur. L'article se concentre sur quatre dimensions : la performance financière, les politiques financières, la structure de gouvernance et la répartition du pouvoir entre trois des principales parties prenantes de l'entreprise : les actionnaires, les dirigeants et les salariés. Les résultats ne montrent aucune différence entre entreprises publiques et privées dans la performance et les politiques financières menées. En revanche, les structures de gouvernance et la répartition du pouvoir entre parties prenantes diffèrent. Dans les entreprises cotées publiques, les employées détiennent plus de pouvoir et récupèrent une plus large part du profit. Pour autant, cette répartition spécifique ne vient pas au détriment de la valeur actionnariale puisque les politiques de dividende et la performance de l'action ne différent pas de celles des entreprises privées.

INTRODUCTION

For the last ten years, financial researchers have questioned the performance of public firms and studied the effects of privatization. In majority, they conclude to the better performance of private companies and to the benefits of privatization. These results follow New Public Management's thoughts about the necessity of competition in the public sector. Theory focuses on the need for competition, but do not offer sufficient reflections on the consequences of government being a shareholder, when firms are in a competitive environment.

This paper aims at participating to this reflection and at understanding the consequences, in a competitive environment, of having a government in the company's ownership. Do governments seek to increase shareholder value as any private shareholder? Does the presence of a government induce different financial policies or governance structures? Do governments lead to a different sharing out of value and power in the company?

To answer these issues, this paper studies the specificities of listed firms with a government as the major shareholder. We focus on four dimensions: financial performance, financial policies, corporate governance and the repartition of power and value between three main stakeholders: shareholders, top managers and employees.

This paper is organized in 3 sections, as follow:

The first section (1.) gives a general survey of the literature on the subject and exposes the problematic of this paper. The following parts present the empirical study conducted to answer the paper issues. The methodology is first introduced (2.). In the last section, we present and discuss the results obtained (3.).

CONSEQUENCES OF GOVERNMENT OWNERSHIP: A REVIEW OF LITERATURE

Consequences of having a government as a shareholder are various. According to the literature, it can impact performance, efficiency and governance. But analyzing the effects of governmental shareholding in listed companies also questions the specific influence a State can have on the firm objectives and the way stakeholders are taken into account.

Researches on the performance of public firms are numerous. We first review the literature on the financial consequences of privatization. We also take a look at researches on the influences of government partial shareholding.

In a second part, we discuss the potential influence of government in the choice of firm's objectives and its consequence on governance structure. Financial theory argues in favor of shareholder value as the main and sometimes only goal a company must have. But the focus on shareholders to the detriment of others stakeholders might go against the general interest defended by the public sector.

Relative performance of private and public firms

Arguments in favor of the private sector's greater efficiency mostly come from the neoclassical framework [START_REF] Alexandre | L'efficacité Des Privatisations Françaises : Une Vision Dynamique À Travers La Théorie De La Gouvernance[END_REF]).

Both agency and public choice theorists argue that private ownership is superior to state ownership. Agency theorists focus on the different agency problems available under each form of ownership. In private firms, agency conflicts are reduced through external mechanisms, such as markets for managers, capital, and corporate control, but also internal mechanisms, such as managerial participation in ownership, reward systems, and the board of directors. In state-owned firms, these mechanisms are virtually absent. Thus, the agency rationale for privatization is that it induces changes in corporate governance and managerial incentives, which, in turn, lead to improved performance [START_REF] Cuervo | Explaining the Variance in the Performance Effects of Privatization[END_REF]).

Beyond agency theory arguments, there are other points going against public ownership efficiency. [START_REF] Krueger | Govemment Failures in Development[END_REF] suggests that government firms may be pressured to hire politically connected people rather than those best qualified to perform desired tasks. For Shleifer (1998), private ownership is a source of incentives to innovate. He argues that "private ownership should generally be preferred to public ownership when the incentives to innovate and to contain costs must be strong."

Empirical literature

An important empirical literature has tested the theoretical arguments in favor of private ownership. For the last twenty years, the developments of financial theory and the apparent poor financial performance of nationalized firms have led to a great trend of privatization all over the world. Researches on the benefits of privatization have been numerous and claim for the better performance of private sector toward nationalized firms. However results are still ambiguous. [START_REF] Dewenter | State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity[END_REF] and La [START_REF] Porta | The Benefits of Privatization : Evidence from Mexico[END_REF] show that privatized firms have a better performance. [START_REF] Boardman | Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed and State-Owned Enterprises[END_REF] conclude that private corporations are significantly more profitable than government firms. After a review of literature on the consequences of privatizations, [START_REF] Megginson | The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis[END_REF] conclude: "Research now supports the proposition that privately owned firms are more efficient and more profitable than otherwise-comparable state owned firms". In France, these results are strengthened by [START_REF] Albouy | L'impact Des Privatisations Sur La Performance Des Entreprises Françaises[END_REF]. [START_REF] Alexandre | L'efficacité Des Privatisations Françaises : Une Vision Dynamique À Travers La Théorie De La Gouvernance[END_REF] also find positive impacts of privatization on the performance of French firms, but the results are not significant.

However, other studies contradict those researches and find no evidence of significant differences in the performance of private and public firms. [START_REF] Caves | The Relafive Efficiency of Public and Private Firms in a Competitive Environment: The Case of Canadian Railroads[END_REF], [START_REF] Martin | Privatization and Economic Performance Throughout the Uk Business Cycle[END_REF], [START_REF] Kole | The Government as a Shareholder: A Case from the United States[END_REF] or [START_REF] Harper | Short Term Effects of Privatization on Operating Performance in the Czech Republic[END_REF] present a body of evidence supporting the view that government firms are intrinsically no less efficient than private firms. In these studies, competition in the product market appears as a more influential determinant of firm efficiency than ownership.

Case of partial government ownership

A firm is considered as public when the government owns the majority of its capital, meaning that ownership is the first criteria to define public firms [START_REF] Delion | De L'etat Tuteur À L'etat Actionnaire[END_REF]). However there is a difference between firms where the government is the only shareholder and firms where it is the major shareholder but not the only one.

All the above researches compare private firms to entirely public firms. In this paper, we try to understand the effects of partial government ownership. Thus, the distinction between entirely public or private firms is not sufficient.

From the agency point of view, listed companies in which government is a shareholder can be monitored by classical external and internal governance mechanisms. Financial markets, minority shareholders and other internal mechanisms enable to monitor efficiently managers.

Moreover, public listed firms usually face another governance mechanism: competition on the product market. This is in accordance with new public management's philosophy that advocates for more market competition in the public sector as it should lead to greater cost efficiency for governments and to a better service. Thus, listed government firms should be controlled efficiently and should offer a similar performance as private firms, no matter their ownership specificity.

The influence of partial governmental ownership has seldom been tested and theorized.

Chinese case has enabled some empirical studies on this particular point. China's privatization program was initiated in April 1984 but the State continues to hold dominant shares in privatized companies. [START_REF] Tian | Retained State Shareholding in Chinese Plcs: Does Government Ownership Always Reduce Corporate Value?[END_REF] find a positive influence of state ownership on firm performance at high levels of state ownership in the Chinese institutional context. [START_REF] Qiulin | Are State-Owned Companies Underperforming? A Case Study of Chinese Listed Property Companies[END_REF] finds no evidence that a state-owned property company is less efficient than a privately-owned property company. However, he notes that political factors might affect the performance of State owned companies because "of the government preferential treatment in terms of obtaining land at no or lower cost, access to cheaper financing, and taxation". This review of literature suggests that firms owned partially by a government are, at least, as efficient as private one. Market's competition and monitoring enable an equivalent performance of private and public firms.

Differences in productivity and financial policies of public and private firms

To better understand the sources of public firms' performance, it is interesting to have a look at the productivity of employees and the financial policies implemented in those firms. In particular, the literature studied the influence of public ownership on productivity, capital structure, pay out policy and investment policy.

-Employees productivity: La Porta and Lopez-de-Silanes (1999) find a significant increase in employees productivity (compared to sales or to assets) after privatization. They also show that government firms use more labor in relation to sales than private firms do and that labor intensity decreases after privatization. [START_REF] Alexandre | L'efficacité Des Privatisations Françaises : Une Vision Dynamique À Travers La Théorie De La Gouvernance[END_REF] also find an improvement in productivity after privatization of French firms.

-Capital structure: According to [START_REF] Dewenter | State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity[END_REF] : "Two factors militate toward greater use of debt by government firms. In most cases, government firms cannot issue stock, except as part of a privatization. Thus, capital […] must be borrowed. Moreover, government firms may enjoy implicit or explicit loan guarantees enabling them to borrow at favorable rates, or they may borrow from the government itself at favorable rates." The results of their empirical analysis confirm their expectation that government firms are more leveraged than private firms. Moreover, they show that leverage decreases significantly after privatization. [START_REF] Megginson | The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis[END_REF] find similar results.

In the case of France Telecom (a French listed public firm), [START_REF] Delion | De L'etat Tuteur À L'etat Actionnaire[END_REF] notes that the company was at a time very leveraged because the State did not want to decrease its ownership and favored debt financing of projects.

However, [START_REF] Alexandre | L'efficacité Des Privatisations Françaises : Une Vision Dynamique À Travers La Théorie De La Gouvernance[END_REF] find no differences in capital structure after French privatizations, and [START_REF] Zou | The Financing Behaviour of Listed Chinese Firms[END_REF] find no influence of state ownership on the capital structure of Chinese listed firms.

-Investment policy : After a review of literature on the consequences of privatizations, [START_REF] Megginson | The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis[END_REF] conclude that privatized firms "increase their capital investment spending." La [START_REF] Porta | The Benefits of Privatization : Evidence from Mexico[END_REF] shows a significant increase of the ratios of investment on assets or investment on sales after privatization. However, [START_REF] Alexandre | L'efficacité Des Privatisations Françaises : Une Vision Dynamique À Travers La Théorie De La Gouvernance[END_REF] find no differences in investment policy and investment expenditures after French privatizations.

-Payout policy: [START_REF] Alexandre | L'efficacité Des Privatisations Françaises : Une Vision Dynamique À Travers La Théorie De La Gouvernance[END_REF] find no differences in dividend payout after a privatization. Du [START_REF] Boys | Rôle Des Conflits D'agence, De La Structure D'actionnariat Et Des Mécanismes De Gouvernance Sur Les[END_REF] compares payout policies of French listed firms depending on their main shareholder. She finds no significant differences when a firm is owned by a government.

Except for payout policies, there are differences in policies implemented in public and private firms. This could explain a difference in performance as noted by some researches and might be a sign of different firms' objectives.

Should shareholder value be the only objective of firms?

In the theoretical literature in favor of private ownership, there is also a concern that public firms forget shareholder value in order to address "social" goals. According to Shleifer (1998), for public firms, profit maximization is only one of the possible objectives, whereas it is the only one for private firms. [START_REF] Boycko | A Theory of Privatization[END_REF] argue that politicians cause government owned firms to employ excess labor inputs. [START_REF] Dewenter | State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity[END_REF] find strong evidence that labor intensity decreases after privatization and argue that « generally, government-owned firms are thought to forgo maximum profit in the pursuit of social and political objectives, such as wealth redistribution".

According to [START_REF] Delion | De L'etat Tuteur À L'etat Actionnaire[END_REF], government ownership can only be maintain if the state guarantee the same value creation as a private shareholder. But he notes the State also has to pursue its objective of general interest. The State "must be a shareholder that integrates complex visions of expected advantages, and that is not confined to monetary profits." However, pursuing general interest is not necessarily at the expense of public firms' performance. Nowadays, the idea that shareholder value is the first and main objective of the firm is challenged [START_REF] Martinet | Gouvernance Et Management Stratégique[END_REF]). The actual crisis, the stakeholder theory and the social responsibility of the firm framework open new ways of reflections. [START_REF] Saulquin | Responsabilité Sociale Des Entreprises Et Performance: Complémentarité Ou Substituabilité?[END_REF] remind that the study of performance can also be done from a stakeholder point of view, looking at the repartition of profits between all stakeholders of the firm. [START_REF] Hafsi | Dirigeants D'entreprises, Focaliser Sur Les Actionnaires N'est Pas Légitime![END_REF] and [START_REF] Denis | Spéculations Autour De L'opa De La Finance Sur La Stratégie[END_REF] warn companies to not only focus on shareholder value as it might destroy value, even for shareholders. Thus, we wonder if listed firms under government ownership pursue different objectives than shareholder value. This would imply different governance structures and repartitions of power and profit between stakeholders. Indeed, firms' objectives are reflected in governance structure : [START_REF] Saulquin | Responsabilité Sociale Des Entreprises Et Performance: Complémentarité Ou Substituabilité?[END_REF] argue shareholder value maximization principle is reflected in the governance structure of private firms and in the objectives of managers. [START_REF] Charreaux | L'entreprise Publique Est-Elle Nécessairement Moins Efficace?[END_REF] argue that the difference in the performance of private or public owned companies is linked to their different governance system. [START_REF] Martinet | Gouvernance Et Management Stratégique[END_REF] and [START_REF] Bachet | Pour Sortir De La Domination Financière[END_REF] plead for a modification of governance structures to enable firms objectives to favor stakeholder value. In particular, for [START_REF] Bachet | Pour Sortir De La Domination Financière[END_REF], the presence of employees at the board is a way to better monitor manager and to favor general interest.

If companies with a government shareholder do actually seek stakeholder value, as suggested by [START_REF] Delion | De L'etat Tuteur À L'etat Actionnaire[END_REF], a different governance structure and a better repartition of power between stakeholders should be observed in public firms. [START_REF] Boujenoui | Analyse De L'évolution Des Mécanismes De Gouvernance D'entreprise Dans Les Sociétés D'état Au Canada[END_REF] show that governance structure of Canadian public firms has evolved and that boards of directors have become more independent from political power and from managers. In France, [START_REF] Delion | De L'etat Tuteur À L'etat Actionnaire[END_REF] notes that there were important governance problems in public firms in the 1980's : too powerful CEOs, inadequacies of internal control… But, the creation of the French Government Shareholding Agency (APE 1 ) and the change in the status of some public firms into listed companies has enabled better governance: improved boards' efficiency, State representative directors are better trained to monitoring, implementation of audit committees, better monitoring of State representatives by the APE… On the other hand, the employees' representation on board has been preserved.

In conclusion, this review of literature suggests that differences between private and public companies might come from different sources: performance, financial policies, governance structure and firm's objectives. Moreover, there should also be differences among public firms, depending on the level of State ownership.

Problematic of the paper

This review of literature shows the differences and similarities between public and private firms. It also underlines the lack of knowledge on consequences of partial government ownership. Thus, this paper seeks to go further in the examination of government owned companies, and propose to study not only their financial performance, but also their objectives, through their governance structure and the repartition of power between stakeholders.

What is the performance of firms with a government as the major but not only shareholder? Does the government as a shareholder pursue its mission of general interest? Are there still references to moral and equity in the government monitoring and control of listed firms? Is it at the price of a poorer performance?

To answer these questions, we proceed to an empirical study described below.

METHODOLOGY OF THE EMPIRICAL STUDY

Sample selection and data sources

To constitute our sample, we selected all the listed firms owned by the French government between 2001 and 2007. We have identified 13 firms in which the government is the major shareholder, which means its ownership is over 15% and it owns a majority of voting right2 .

To get a better understanding on how the French government acts as a shareholder, we compared those 13 firms to equivalent private listed firms not significantly owned by any government. Two control samples are built. The first one is made up of French, German and British companies from the same industry, with similar turnover and number of employees.

However comparing firms belonging to different countries can distort results. So a second sample was built with only French firms. It includes firms from the same industry, but whose turnover and number of employees are, for some of them, slightly less similar.

The use of two control samples limits the bias linked to the comparison of firms from different countries or of different sizes.

For all firms from the control sample, we collected data on the exact same period of time as for the equivalent government owned firm. Table 1 describes our three samples. In the sample one, turnover and number of employees are, for some of them, slightly less similar. In the second sample, turnover and number of employees is similar, but nationality of firms differs.

Measurement of variables

To determine differences between public and private firms, we focus on four dimensions: financial performance, financial policies, corporate governance and the repartition of power between shareholders, top managers and employees. Table 2 presents the variables and the measures used to study these four dimensions.

For each company, we collected information concerning shareholding and governance from the companies' annual reports. Accounting data and market prices result from the database Datastream -Worldscope.

Method of analysis

To compare public and private firms we performed mean difference tests. We compared successively the public firms sample to the two private firms samples.

For each comparison, we checked the equality of variance. In case of non equality we used the appropriate t statistic. For dummy variables we performed Khi² tests.

The non normality of data is not a problem in our study. Indeed, the tests used are robust to non normality of data as long as each sample size is over 30. In our case, each sample is composed of more than 50 firm/year observations. We also checked that our results are not distorted by extreme values.

RESULTS AND DISCUSSION OF THE EMPIRICAL STUDY

The comparison of companies owned by the French government with non government companies shows great similarities on financial performance and financial policies. The major differences concern the corporate governance structure and the repartition of power between shareholders, top managers and employees. We discuss those four aspects before concluding on the paper's contributions.

Comparison of financial performance and policies

First tests study the financial performance of public firms compared to private ones. Table 3 presents the results of the comparison. We also compared the financial policies: investment policy, capital structure and payout policies. Table 4 presents the results of these tests. Table 3 shows that the financial performance of firms where government is a shareholder is not significantly different from private firms. The public firms' return on equity, return on sales and stock price performance are smaller but not significantly. This similar performance is partly explained by the fact that private and public financial policies are quite close (Table 4). Indeed, payout policies, debt structure and the ratio of investment expenditures on assets are comparable.

We only observe significant differences in return on assets (ROA), Tobin's Q and productivity of employees. We also notice greater investment expenditures on sales in public firms, and a different level of debt. However, we think differences in debt and Tobin's Q are not significant:

-The difference in the level of debt is only significant when comparing with the second sample. And it concerns short term debt as the long term debt ratio is similar. So we assume that the capital structure do not differ significantly between public and private firms.

-Moreover, differences in Tobin's Q only appear when comparing public firms to the first sample. Tobin's Q is also a measure of investment opportunities as comprehended by markets. So, differences can be explained by the greater investment opportunities of those private French firms. The French sub sample includes some smaller firms, who might have taken advantages of the recent opening to competition of some ex public markets. So, it seems logical they face some greater investment opportunities. However, we do not find the same differences with the second sample.

We can conclude that government ownership in companies do not lead to a smaller market performance or less investment opportunities.

On the other hand, the comparison of the ROA ratio shows a lower performance of public firms. Indeed, the level of assets for public firms is bigger. This is linked to the fact that public firms invest more than private firms: the ratio of investment expenditures on sales is higher for public firms. This important level of assets damages the economic profitability. We wonder why public firms have more assets: do they need more assets? Is it a consequence of their former status of public firm? Or is it a sign of capital waste and unprofitable investment?

At last, we note a significantly higher productivity of employees in public firms, contrary to results from previous researches on productivity of public firms. It suggests productivity increases when the firm becomes listed, or when the government shares ownership with private investors. This better performance may be the consequence of the specific repartition of power and profit in government listed companies, as shown in the following section.

In conclusion, these results bring a new point of view to the study of privatization and government shareholding. According to literature, privatization has a positive influence on the financial performance of firms. Our results complete these studies by showing that the presence of a government as a shareholder has no negative impact on performance. Even more, the productivity of employees seems better when the government is the major shareholder.

Thus, we suggest that a lack of competition or a lack of monitoring by financial markets might weaken a firm performance, but not the fact a firm is owned by a government.

Comparison of corporate governance and repartition of power

The comparison of public firms with private ones shows great similarities on financial performance and financial policies. We now wonder if this similar performance is a consequence of firms having the same objective: shareholder value, or do public firms succeed in being efficient while seeking stakeholder value. As mentioned in our literature review, different firms' objectives should lead to different governance structure.

Thus, to investigate this issue, we compare the governance structure and the repartition of power and profit between shareholders, top managers and employees in public and private firms. Our tests show major differences.

Table 5 and Table 6 present the results of the comparison between corporate governance structures of public firms and private ones. We also compared the repartition of power between public firms and private ones. Table 7 presents the results of these tests. Our tests show major differences between private and public listed companies concerning the corporate governance structure, and the repartition of power between shareholders, top managers and employees.

In public listed companies, the board of directors' structure differs from what is suggested by corporate governance codes worldwide and from what the private equivalent companies do.

Boards are bigger and less independent. CEOs are more frequently the chairman of the company. In compensation, boards are always assisted by an auditing committee and often by nomination or remuneration committees. Moreover, dual voting rights are less frequent.

A part of those divergences results from law. The composition of public companies' board is regulated. The laws of July 1983, August and October 1986 and the Giraud law of 1994 generalize the presence of employees as director in companies controlled by the French State [START_REF] Hollandts | Les Salariés Capitalistes Et La Performance De L'entreprise[END_REF]). For companies over 1 000 employees, a third of directors must be employees. The number of state representatives is also regulated. Thus, the lack of board independence in public companies is explained by the large number of state representatives and employees.

The French government also forces companies it controls to promote employees' ownership and to put a representative of employees shareholders at the board. However, we note no differences in employees' ownership between public and private firms.

It appears that "good governance principles" are not well implemented in public companies, but as seen before, it does not seem to affect performance. In fact, those principles are sometimes called into question as they might not be adapted to all companies. Top managers of companies with a government as the major shareholder may be controlled a different way.

In public firms, CEOs are monitored in a different way. They are paid less, but with a bigger part of the salary indexed on performance. They are given less stock-options and have a smaller ownership in the company. Employees are also part of the monitoring process of managers as they are represented at the board of directors.

From a minority shareholder point of view, this governance structure does not have to be questioned. Indeed, dividend payout and stock performance are equivalent to those of private firms who yet have smaller and more independent boards.

Our tests also show a different repartition of profit between top managers and employees.

Beyond promoting employees' presence at the board, we also note that employee' wages compared to top managers' ones are higher than in private firms. The part of top managers' remuneration in payroll is also smaller. Even if the relative growth of the number of employees is equivalent to private firms, the relative power of employees is significantly higher in public firms.

The French government, through law or internal regulation, appears to offer more control and profit to employees. The performance of the firm is not significantly impacted by this specific repartition between top managers and employee and the part of profit going to shareholders is not reduced. The French government treats himself and the minority shareholders as in any other private companies. Thus, this stronger consideration to employees is not a cost to shareholders, but maybe it is to top managers.

These facts might evolve. Recently, within the framework of a national crisis plan to help car manufacturers, the French government has granted a loan to Renault. It then asked Renault not to pay dividends in 2009 3 . Moreover, recently the French president Nicolas Sarkozy proposes a reflection on other ways to share out profit between shareholders and employees in French companies. This might have soon an impact on the repartition of profits in companies where the French government is a major shareholder and enables a fairer repartition not only between managers and employees, but also shareholders.

CONCLUSION

Our study underlines several differences between listed firms, whether they are owned by the French government or not. Their performance and their financial policies are very close, however the governance structure and the repartition of profit is different.

According to governance code, "public" boards should be less efficient in monitoring managers, as they are bigger, less independent and because of the non separation of the chairman and CEO functions. But the presence of a government as a shareholder, as well as the employees and committees' monitoring on managers may act as a substitute to classic monitoring tools such as stock-options, managerial shareholding or independent boards. This different governance structure enables public firms to be as profitable as private ones.

Specificities linked to government ownership also drives to a different repartition of profit.

Employees appear to capture a larger part of profit and power to the detriment of top managers. They are better paid and participate more to the decision process. However, shareholders do not seem to suffer from this different sharing out. The French government treats himself as any private shareholder who seeks shareholder wealth. Dividend policy and stock price performance do not differ from a private company.

If the performance of a firm can suffer from a lack of competition, it seems not impacted by the government control. Moreover, the government ownership enables a different repartition of profit fairer to employees. This might be a sign of a more social responsible behavior of public firms than private ones. In these times of economic crisis where top managers' power is challenged, this behavior might be more and more frequent even in private companies.

To complete this study, it would be interesting to analyze foreign governments' behavior toward listed firms they control. Do they also have different governance structure or repartition of power? Are they also inclined to pursue stakeholder value more than shareholder value? It would also be interesting to go deeper in the comparison of social and environmental responsibility between government owned companies and private firms. Do governments' shareholding drives to more ethical companies than private shareholding?

Table 1 -Presentation of the samples Main sample : Public firms Control samples : Private firms Government owned companies Average government ownership Period of study

 1

	Industry Classification (ICB)	Control sample 1 : French companies	Control sample 2 : French, German and British companies

Table 2 (Part 1) -Definition and measure of variables

 2

	DV = Dummy Variable
	Financial Performance
		Abnormal return of stock price over a year
		RA1 = (Stock price end of year -Stock price beginning of year) / Stock
		price end of year
	Stock market	-(SBF250 index value end of year -SBF250 index value beginning
	performance	of year) /
		SBF250 index value end of year
		Tobin's Q
		QTOBIN = (Capitalization + Debt Value ) / Book Value
		Return on Sales
		ROS = Net income / Sales
	Accounting	Return on Assets
	performance	ROA = Net income / Assets
		Return on Equity
		ROE = Net income / Book value of equity
		Sales per employee
	Productivity	SPE = Sales / Number of employees Income per employee
		IPE = Net income / Number of employees
	Financial policies
	Investment policy	Investment expenditures CESA = Investment expenditures / sales CETA = Investment expenditures / assets
		Debt
	Debt & capital	DEBT = Total debt / Assets
	structure	Long term debt
		LTDEBT = LT debt / Assets
		Payout rate
	Payout policy	PAYOUT1 = Dividend / Net income Payout yield
		PAYOUT2 = Dividend / Capitalization

Table 2 (Part 2) -Definition and measure of variables

 2

	DV = Dummy Variable
	Corporate governance
		Dual voting rights
		VOTE => DV = 1 if there are shares with dual voting rights
		Size of board
		SIZE = Number of directors
		Board independence
	Voting rights, Board and Committees	IND = % of independent directors Dissociation of the functions of chairman and CEO DISSCEO => DV = 1 if the functions are dissociated Remuneration committee
		REMUCOM : DV = 1 if there is a remuneration committee
		Nomination committee
		NOMICOM : DV = 1 if there is a nomination committee
		Audit committee
		AUDITCOM : DV = 1 if there is an audit committee
		Managerial ownership
		MANOW = % of Managerial ownership
	Managerial	Stock options held by managers
	incentives	STOCKOPT = Number of executive stock-options / Total shares
		Performance related remuneration
		VARSAL : Part of managerial remuneration indexed on performance

Repartition of power and profit between managers, shareholders and employees Relative remuneration of top managers and employees

	Managers / Employees	MANEMP = Top managers mean remuneration / Employee mean remuneration Importance of top managers remuneration
		MANEMP2 = Top managers mean remuneration / Payroll
		Growth of employees
		EMPGROWTH = Relative growth of number of employees
		Employees ownership
	Employees	EMPOW = % of Employee ownership Directors employee
		DIREMP : Number of directors who are employees
		Directors representative of employees shareholders
		DIRAS : Number of directors representative of employees shareholders
	Shareholders	Payout, Stock market performance

Table 3 -Financial performance: Results of mean differences tests between public and private firms

 3

RA1: Abnormal return of stock price over a year -QTOBIN: Tobin's Q -ROS: Return on Sales -ROA: Return on Assets -ROE: Return on Equity -SPE: Sales per employee -IPE: Income per employee Control

sample 1 French companies Control sample 2 French, German and British companies Variables Firms

			Mean	t	Mean	t
	RA1	PUBLIC	5,93%	-1,571	3,95%	-1,274
		PRIVATE	19,07%		10,27%
	QTOBIN	PUBLIC PRIVATE	,6858 ,8404	-2,382**	0,74 0,82	-1,435
	ROS	PUBLIC PRIVATE	3,67% 3,86%	-,150	2,72% 3,16%	-,276
	ROA	PUBLIC PRIVATE	0,36% 3,42%	-1,979*	0,18% 2,76%	-1,800*
	ROE	PUBLIC PRIVATE	11,98% 13,52%	-,363	15,26% 24,63%	-,880
	SPE	PUBLIC PRIVATE	260,7984 162,9460	5,315***	257,1600 218,7943	-1,902*
	IPE	PUBLIC PRIVATE	12,5845 6,2282	1,957*	10,4067 8,3383	-,516

*, **, *** significant at the 10%, 5% and 1% level, respectively

Table 4 -Financial policies: Results of mean differences tests between public and private firms

 4

CESA: Investment expenditures on sales -CETA: Investment expenditures on assets -DEBT: Debt on assets -LTDEBT: Long term debt on assets -PAYOUT1: Payout rate -PAYOUT2: Payout yield Control

sample 1 French companies Control sample 2 French, German and British companies Variables Firms Mean t Mean t

	CESA	PUBLIC	10,27%	3,955***	10,71%	3,760***
		PRIVATE	5,03%		5,91%
	CETA	PUBLIC PRIVATE	5,20% 4,64%	,887	5,37% 4,84%	,857
	PAYOUT1	PUBLIC PRIVATE	61,58% 34,11%	1,148	62,56% 96,60%	-,408
	PAYOUT2	PUBLIC PRIVATE	2,00% 2,14%	-,619	2,13% 2,25%	-,430
	DEBT	PUBLIC PRIVATE	28,30% 31,41%	-,978	31,84% 23,08%	2,630***
	LTDEBT	PUBLIC PRIVATE	20,46% 19,44%	,361	23,43% 22,62%	,276

*, **, *** significant at the 10%, 5% and 1% level, respectively

Table 5 -Corporate governance: Results of mean differences tests between public and private firms MANOW:

 5 Managerial ownership -SIZE: Size of board Number of directors -IND: % of independent directors -STOCKOPT: Stock options held by managers -VARSAL: Performance related remuneration

	Variables	Firms	Control sample 1 French companies	Control sample 2 French, German and British companies
			Mean	t	Mean	t
		PUBLIC	00,02%		0,01%
	MANOW			-5,68***		-5,08***
		PRIVATE	23,89%		17,35%
	SIZE	PUBLIC PRIVATE	15,85 11,48	6,909***	16,07 12,24	6,559***
	IND	PUBLIC PRIVATE	24,59% 43,16%	-5,92***	25,31% 45,31%	-7,39***
	STOCKOPT	PUBLIC PRIVATE	00,45% 2,04%	-2,008**	0,39% 1,45%	-1,762*
	VARSAL	PUBLIC PRIVATE	37,90% 30,68%	2,295**	37,71% 30,44%	2,411**
	*, **, *** significant at the 10%, 5% and 1% level, respectively

Table 6 -Corporate governance: Results of Khi² tests between public and private firms

 6

	VOTE: Dual voting rights -DISSCEO: Dissociation of the functions of chairman and CEO -REMUCOM:
	presence of a remuneration committee -NOMICOM: presence of a nomination committee -AUDITCOM:
	presence of an audit committee
	Control sample 1

French companies Control sample 2 French, German and British companies Variables Modalities of dummy variables PUBLIC FIRMS PRIVATE FIRMS Khi² PUBLIC FIRMS PRIVATE FIRMS Khi²

	VOTE	No	36	3	46,88***	43	27	15,70***
		Yes	11	43		11	35
	DISSCEO	No Yes	30 17	13 33	11,83***	37 17	13 49	26,61***
	REMUCOM	No	5	12	3,71*	5	15	4,51**
		Yes	42	34		49	47
	NOMICOM	No	11	20	4,21**	13	22	1,78
		Yes	36	26		41	40
	AUDITCOM	No	0	14	16,84***	0	14	13,87***
		Yes	47	32		54	48
	*, **, *** significant at the 10%, 5% and 1% level, respectively

Table 7 -Repartition of power: Results of mean differences tests between public and private firms EMPOW:

 7 % of Employee ownership -DIREMP: Number of directors who are employees -DIRAS: Number of directors' representative of employee shareholders -MANEMP: Top managers mean remuneration / Employee mean remuneration -MANEMP2: Top managers mean remuneration / Payroll -EMPGROWTH: Relative growth of number of employees

	Variables	Firms	Control sample 1 French companies	Control sample 2 French, German and British companies
			Mean	t	Mean	t
	EMPOW	PUBLIC PRIVATE	5,02% 3,71%	1,158	4,73% 3,41%	1,354
	DIREMP	PUBLIC PRIVATE	3,19 0,07	9,264***	3,44 0,53	6,958***
	DIRAS	PUBLIC PRIVATE	0,94 0,24	4,896***	0,87 0,18	5,622***
	MANEMP	PUBLIC PRIVATE	17,0082 35,1818	-4,015***	17,92 26,24	-2,857***
	MANEMP2	PUBLIC PRIVATE	0,0003 0,0006	-3,246***	0,0003 0,0005	-2,795***
	EMPGROWTH	PUBLIC PRIVATE	6,26% 5,67%	0,098	5,34% 3,39%	0,397

*, **, *** significant at the 10%, 5% and 1% level, respectively

APE = Agence des participations de l'Etat

In the case of BULL, the French government is the first shareholder, but it has the same level of control as three others corporate shareholders. For all the other companies, the government is alone as the first shareholder.

For more details look at newspaper article : Les Echos, 15 janvier 2009, "L' Etat Pousse Renault À Renoncer Au Versement D'un Dividende", Fainsilber D.