THE FRUITS OF ITERATIVE LEARNING AND NEGATIVE PERFORMANCE FEEDBACKS: EVIDENCE FROM PRIVATE EQUITY BACKED BUYOUTS

Francesco Castellaneta (), O. Gottschalg () and Mike Wright

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: We open up the black box of learning from experience by building upon the emerging stream of research on learning from performance feedbacks. We go beyond prior research that has regarded experience as a homogenous construct by introducing and theorizing three specific attributes of experience: the quantity of performance feedbacks, the incompleteness of performance feedbacks and the proportion of negative performance feedbacks. We test specific hypotheses regarding the joint impact of these three factors on performance using a novel, proprietary dataset relating to the private equity industry. Largely in line with our expectations, we find that performance feedbacks quantity and incompleteness have a negative impact on performance, and that these negative impacts are alleviated by the proportion of negative performance feedbacks received.

Pages: 35 pages
Date: 2012-02
New Economics Papers: this item is included in nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:12/770

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