 Private Equity as an Alternative Corporate Restructuring Scheme: Does Private Equity Increase the Operating Performance of PE-Backed Firms?Ja Hyun Koo KDI Journal of Economic Policy, 2016, vol. 38, issue 2, 21-44 Abstract: There has been a surge of interest in private equity as an alternative corporate restructuring scheme to complement the current institutional forms such as workouts and court receivership. By empirically examining whether private equity in Korea can improve investee companies, we find that while private equity in Korea did not sacrifice the long-term growth potential of investee firms, it did not improve their profitability (e.g. ROA, ROE, and ROS) or growth (e.g. sales growth) either. Both the negative correlation between business performance and firm age and our empirical results showing that young firms were favored by private equity for investment imply that Korean private equity may perform as growth capital, similar to venture capital rather than as buyouts for corporate restructuring. Keywords: private equity; corporate restructuring; business performance; buyouts; growth capital (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:zbw:kdijep:v:38:y:2016:i:2:p:21-44 DOI: 10.23895/kdijep.2016.38.2.21 Access Statistics for this article KDI Journal of Economic Policy is currently edited by Dongseok Kim More articles in KDI Journal of Economic Policy from Korea Development Institute (KDI) Contact information at EDIRC. |
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