Private equity in the global economy: Evidence on industry spillovers

Serdar Aldatmaz and Gregory W. Brown

Journal of Corporate Finance, 2020, vol. 60, issue C

Abstract: Using a novel dataset on global private equity investments in 19 industries across 52 countries, we find that labor productivity, employment, profitability, and capital expenditures increase for publicly-listed companies in the same country and industry as private equity investments. Our results show that positive externalities created by private equity firms are absorbed by other companies within the same industry. Consistent with prior literature on competitive spillovers, these effects are more pronounced in country-industries with higher levels of competition, stronger institutions, and moderate levels of technological development suggesting that the competitive pressures from private equity-backed firms cause industry peers to react.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:60:y:2020:i:c:s0929119918307405

DOI: 10.1016/j.jcorpfin.2019.101524

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