Corporate network embeddedness and the success of portfolio companies: evidence from the French private equity industry

Sana Elouaer-Mrizak (), Bulat Sanditov () and Donia Trabelsi ()
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Sana Elouaer-Mrizak: CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique, ULCO - Université du Littoral Côte d'Opale
Bulat Sanditov: IMT-BS - DEFI - Département Droit, Économie et Finances - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]
Donia Trabelsi: IMT-BS - DEFI - Département Droit, Économie et Finances - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris], KIND - Dynamique des réseaux, de l'innovation et de la connaissance - IMT-BS - Institut Mines-Télécom Business School - IMT - Institut Mines-Télécom [Paris]

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Abstract: This paper examines the role that private equity (PE) networks play in the success of PE-backed firms in France over the period 1989–2016. We make the distinc-tion between corporate private equity (CPE) and independent private equity (IPE) firms, and we investigate whether the effect of the PE network on the success of portfolio firms varies between these two groups of investors. We show that port-folio firms backed by larger and more active PE firms are more likely to survive and make a successful exit. Further, we find that, in terms of the probability of success of their port-folio firms, French CPE firms do not systematically differ from their IPE counterparts. The network position of the investor matters—more central PE firms are more likely to bring their portfolio firms to a successful exit. However, our results also suggest that CPE and IPE firms may differ in terms of the effect of the firm's network position: being close to other investors is important for CPE firms but not for IPE firms.

Keywords: Corporate private equity; Network effects; Sustainable Development Goals; Capital Investissement d'Entreprise; Effet de réseau; Objectifs de Développement Durable (search for similar items in EconPapers)
Date: 2020
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Published in Revue de l'Entrepreneuriat, 2020, 19 (1), pp.61-79. ⟨10.3917/entre1.191.0061⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02965469

DOI: 10.3917/entre1.191.0061

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