Still “champions”

France still has more corporate champions than most countries, even after losing the power division of Alstom to General Electric.

Globalization has caused many countries to worry about losing some of their star corporations to mega mergers and acquisitions. Canada was concerned about losing Macdonald Dettwiler and Associates (MDA), Potash Corp. of Saskatchewan Inc. and Alcan (Rio Tinto Alcan Inc). Now it is France’s turn to suffer the existential angst of seeing the power division of Alstom, a maker of turbines and trains, fall into the hands of General Electric. But even after "losing" Alstom, France still has more corporate champions than many countries, claims Nicolas Véron, a visiting fellow at the Peter G. Peterson Institute for International Economics in Washington, DC, who was credited by Bloomberg Markets magazine in 2012 as one of the 10 most influential thinkers in the world.

"The description of mass corporate exodus fits a narrative of national decay," writes Véron. France’s exports are slumping, its tax burden has grown unbearably high, its credit has been downgraded, its best minds and entrepreneurs are emigrating.

But on the specific issue of corporate champions, the narrative isn’t backed up by reality. "If anything, the opposite is true," claims Véron.

He bases his observation on different countries’ representation in the 2013 Financial Times’ 500 list by number of companies and by market capitalization. In terms of number of companies, and in comparison with a world average of 1.0, France has a score of 1.50 Surprisingly, Germany comes in at 0.9 and Japan barely tops the world average at 1.1. The US and Canada both have scores of 1.8, but don’t quite make it to the top compared with Sweden (2.6) and Switzerland (3.2). Market capitalization figures show similar patterns. Since 1996 France has come a long way, as have other countries. France scored 0.75 for number of companies that year, while Germany stood at 0.45, Canada at 1.0, and the United States at 1.5. The world champion was Hong Kong (4.1).