Exploring cross-country influences on private equity investment

Matteo Rossi, Arturo Capasso, Brigitte Pereira, Charbel Salloum () and Youcef Meriane ()
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Youcef Meriane: UR CONFLUENCE : Sciences et Humanités (EA 1598) - UCLy - UCLy (Lyon Catholic University), ESDES - ESDES, Lyon Business School - UCLy - UCLy - UCLy (Lyon Catholic University)

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Abstract: This study aims to examine the key factors influencing Private Equity (PE) investment across countries, focusing on macroeconomic and institutional variables, particularly intellectual property protection, legal frameworks, economic growth, transparency, taxation and banking efficiency. Design/methodology/approach The research uses panel data analysis across multiple countries and years, with random and fixed effects models to evaluate the relationship between PE attractiveness and various independent variables, identifying statistically significant predictors of PE investment. Findings Intellectual property protection, represented by the International Property Index, is the most significant factor affecting PE attractiveness. Contrary to expectations, economic growth, taxation and banking sector efficiency are not significant predictors. The findings suggest that strong intellectual property protections create a secure environment essential for fostering PE investment, especially in innovation-driven sectors. Research limitations/implications This study is limited to country-level factors, excluding firm-specific variables. Future research could explore micro-level elements to assess their interaction with institutional factors in shaping PE attractiveness. Practical implications Policymakers can attract PE by enhancing intellectual property protections and regulatory stability, aligning with the security PE investors seek. Social implications Strengthening property rights not only attracts investment but also supports innovation and economic development, fostering job creation and technological advancement, particularly in emerging economies. Originality/value The study contributes to Institutional Theory by highlighting the role of stable legal frameworks, particularly in intellectual property rights, in attracting PE investments. It provides new insights, suggesting that institutional factors like property rights often outweigh traditional economic indicators in driving PE activity.

Keywords: Croissance économique; Propriété intellectuelle; Droits de propriété; Théorie institutionnelle; Capital-investissement (search for similar items in EconPapers)
Date: 2025-06
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Published in Review of Accounting and Finance, 2025, 24 (5), pp.659-682. ⟨10.1108/RAF-02-2025-0057⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05496118

DOI: 10.1108/RAF-02-2025-0057

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