Private Equity Buyouts and Workplace Safety

Jonathan Cohn, Nicole Nestoriak, Malcolm Wardlaw and Wei Jiang

The Review of Financial Studies, 2021, vol. 34, issue 10, 4832-4875

Abstract: This paper presents evidence of a large, persistent decline in establishment-level workplace injury rates after private equity (PE) buyouts of publicly traded U.S. firms. We find that firms experience fewer OSHA safety violations after buyouts and that a larger decline in injury rates is associated with an increased probability of exit via IPO. Employment reductions after buyouts are concentrated in relatively low-injury-risk establishments. Overall, our results suggest that buyouts improve workplace safety and that PE acquirers benefit from this improvement. We explore possible causes of these changes through interviews with executives of companies acquired in buyouts and through cross-sectional analysis.

JEL-codes: G31 G34 J28 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (19)

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