 The evolution of capital structure and debt governance: Evidence from private equity-backed companies in JapanYasutake Iioka and Yuji Yamada Pacific-Basin Finance Journal, 2023, vol. 79, issue C Abstract: This study aims to clarify how leverage is effectively utilized in private equity (PE)-backed buyouts by investigating the empirical performance of PE investment in Japan as an emerging yet growing PE market. Based on data on PE-backed buyouts in Japan, we show that the capital structure of post-buyout companies changes towards higher leverage, and that a relatively higher level of leverage is observed for public-to-private deals and/or buyouts by PE firms with higher reputations. Moreover, the more leverage an investee company has, the more disciplined the management is while a PE firm secures the post-buyout investment return. We conclude that the level, determinants, and functions of the leverage of investee companies are influenced by attributes of individual deals, as well as the financial system and/or corporate culture of companies. Keywords: Private equity; Capital structure; Leveraged buyout; Debt governance; Recapitalization; Propensity score matching (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23000835 DOI: 10.1016/j.pacfin.2023.102017 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.