Effects of Foreign Investment on Domestic Private Equity

Hernan Herrera-Echeverri, John Rosso and Daniel Felipe Fragua

International Journal of the Economics of Business, 2021, vol. 28, issue 2, 247-279

Abstract: Using a sample of 23 OECD countries, studied over a period of 20 years (1995–2015), we find that direct foreign investment has a spillover effect on private equity (PE) in that it supports the development of the domestic PE industry. We also show how contextual variables influence the investment process. Our results suggest that a positive effect on domestic PE dynamics can be seen if the number of foreign PE deals is measured, while calculations using the value of foreign PE investments show mixed results. The positive effect of foreign investment on domestic PE activity persists where low gross capital formation is adopted and in low value-added environments. Foreign PE investment increases overseas activity in the host country’s domestic PE industry. These effects are proportional to the size of the foreign fund. Foreign PE activity related to firms in the early stages of development encourage domestic PE industry activity in the same kind of firms.

Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13571516.2020.1783938 (text/html)
Access to full text is restricted to subscribers.

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:taf:ijecbs:v:28:y:2021:i:2:p:247-279

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIJB20

DOI: 10.1080/13571516.2020.1783938

Access Statistics for this article

International Journal of the Economics of Business is currently edited by Eleanor Morgan

More articles in International Journal of the Economics of Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().