Lavery, P., Tsoukalas, J. and Wilson, N. orcid.org/0000-0001-5250-9894 (Cover date: January 2024) Private equity financing & firm productivity. Working Paper. The Productivity Institute Working Papers . The Productivity Institute
Abstract
We study the impact of private equity funding and ownership on firm level productivity using a comprehensive dataset of private equity transactions from the U.K. We outline the mechanisms through which private equity, as active owners, can build resilience and drive productivity growth in their portfolio firms. We find that, in comparison to a control group, private equity target firms enjoy a statistically significant productivity boost after acquisition. Our analysis suggest that this beneficial productivity effect persists even after the private equity fund exits the firm. We find statistically significant increases in employment and capital expenditures in target firms, in comparison to the control group, supporting the view that private equity unlocks the growth potential of firms. Moreover, our analysis suggests that target firm productivity may be more resilient during times of major disruptive episodes such as the Global Financial Crisis and the COVID-19 pandemic.
Metadata
Item Type: | Monograph |
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Authors/Creators: |
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Keywords: | Private equity buyouts; productivity; investment; firm growth |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 11 Jan 2024 11:31 |
Last Modified: | 07 Feb 2024 15:44 |
Published Version: | https://www.productivity.ac.uk/research/private-eq... |
Status: | Published |
Publisher: | The Productivity Institute |
Series Name: | The Productivity Institute Working Papers |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:207469 |