Barbarians at the Store? Private Equity, Products, and Consumers

Cesare Fracassi, Alessandro Previtero and Albert W. Sheen

No 27435, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the effects of private equity on product markets using price and sales data for an extensive number of consumer products. Following a buyout, target firms increase sales 50% more than matched control firms. Price increases—roughly 1% on existing products—do not drive this growth. The launch of new products and geographic expansion do. Competitors lose shelf space and marginally raise prices. Results for public vs. private targets, during and after the financial crisis, and in industries that vary in structure suggest private equity tailors strategies to the environment, eases financial constraints, and provides expertise to manage growth.

JEL-codes: G24 L11 (search for similar items in EconPapers)
Date: 2020-06
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Note: CF IO
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Citations: View citations in EconPapers (7)

Published as CESARE FRACASSI & ALESSANDRO PREVITERO & ALBERT SHEEN, 2022. "Barbarians at the Store? Private Equity, Products, and Consumers," The Journal of Finance, vol 77(3), pages 1439-1488.

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