Exploring cross-country influences on private equity investment

Matteo Rossi, Arturo Capasso, Brigitte Pereira, Charbel Salloum and Youcef Meriane

Review of Accounting and Finance, 2025, vol. 24, issue 5, 659-682

Abstract: PurposeThis 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/approachThe 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.FindingsIntellectual 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/implicationsThis 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 implicationsPolicymakers can attract PE by enhancing intellectual property protections and regulatory stability, aligning with the security PE investors seek.Social implicationsStrengthening property rights not only attracts investment but also supports innovation and economic development, fostering job creation and technological advancement, particularly in emerging economies.Originality/valueThe 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: Private equity; Institutional theory; Property rights; Intellectual property; Economic growth (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/raf/article/24/5/659/12691 ... nfluences-on-private (text/html)
https://www.emerald.com/raf/article-pdf/24/5/659/10742120/raf-02-2025-0057en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:rafpps:raf-02-2025-0057

DOI: 10.1108/RAF-02-2025-0057

Access Statistics for this article

Review of Accounting and Finance is currently edited by Nawazish Mirza

More articles in Review of Accounting and Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().