Private equity and financial distress: A bibliometric literature review

Cristina De Silva, Belinda Laura Del Gaudio, Anna Gervasoni and Michele Lertora

Research in International Business and Finance, 2025, vol. 74, issue C

Abstract: This paper presents a bibliometric literature review to examine the impact of private equity (PE) on portfolio companies' financial distress. Due to PE's increasing role in the economy, this topic is of growing interest. Our analysis encompasses 151 publications, exploring co-occurrence networks, co-citation patterns, publication patterns and key research streams. The existing literature shows that PE-backed companies' risk of distress increases following a buyout. However, when controlling for leverage, this does not result in higher bankruptcy rates compared to non-PE-backed companies. Furthermore, PE-backed companies are more likely than non-PE-backed peers to avoid insolvency in the event of financial distress. This ability to manage financial distress effectively is attributed to corporate governance mechanisms based on active and concentrated ownership, availability of financial resources, and reputational concerns. In addition, the study identifies future research avenues and provides valuable insights for academic scholars, industry practitioners, and policymakers alike.

Keywords: Financial distress; Private equity; Corporate crises; Restructuring; Turnaround (search for similar items in EconPapers)
JEL-codes: G23 G33 G34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:74:y:2025:i:c:s0275531924004677

DOI: 10.1016/j.ribaf.2024.102674

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