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Private equity investment decisions in family firms: The role of human resources and agency costs

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  • Dawson, Alexandra

Abstract

This study examines decision making criteria that are employed by private equity (PE) investors selecting family firms. Hypotheses test the likelihood of investment based on family firm characteristics. Findings show that PE professionals take into account family-specific criteria, including human resources and opportunities to reduce agency costs. Furthermore, PE professionals prefer family firms that are already professionalized. This research contributes to the family firm literature on both a theoretical and a methodological level, exploring nonfamily succession routes and employing techniques-- conjoint analysis for data collection and multilevel models for data analysis-- that have seldom been used in this context.

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  • Dawson, Alexandra, 2011. "Private equity investment decisions in family firms: The role of human resources and agency costs," Journal of Business Venturing, Elsevier, vol. 26(2), pages 189-199, March.
  • Handle: RePEc:eee:jbvent:v:26:y:2011:i:2:p:189-199
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    References listed on IDEAS

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    Cited by:

    1. Ahlers, Oliver & Hack, Andreas & Kellermanns, Franz W., 2014. "“Stepping into the buyers’ shoes”: Looking at the value of family firms through the eyes of private equity investors," Journal of Family Business Strategy, Elsevier, vol. 5(4), pages 384-396.
    2. repec:kap:jmgtgv:v:21:y:2017:i:3:d:10.1007_s10997-016-9364-2 is not listed on IDEAS
    3. repec:kap:jmgtgv:v:21:y:2017:i:4:d:10.1007_s10997-016-9373-1 is not listed on IDEAS
    4. Hanisch, David N. & Rau, Sabine B., 2014. "Application of metric conjoint analysis in family business research," Journal of Family Business Strategy, Elsevier, vol. 5(1), pages 72-84.
    5. repec:eee:fambus:v:9:y:2018:i:1:p:73-90 is not listed on IDEAS
    6. repec:kap:jmgtgv:v:21:y:2017:i:3:d:10.1007_s10997-016-9355-3 is not listed on IDEAS
    7. repec:eee:jbrese:v:84:y:2018:i:c:p:327-336 is not listed on IDEAS
    8. repec:spr:jbecon:v:88:y:2018:i:2:d:10.1007_s11573-017-0871-7 is not listed on IDEAS
    9. Felix K. Thiele, 2017. "Family businesses and non-family equity: literature review and avenues for future research," Management Review Quarterly, Springer;Vienna University of Economics and Business, vol. 67(1), pages 31-63, February.
    10. Patricia Crifo & Vanina Forget & Sabrina Teyssier, 2012. "The price of unsustainability: An experiment with professional private equity investors," Working Papers hal-00757203, HAL.
    11. Dehlen, Tobias & Zellweger, Thomas & Kammerlander, Nadine & Halter, Frank, 2014. "The role of information asymmetry in the choice of entrepreneurial exit routes," Journal of Business Venturing, Elsevier, vol. 29(2), pages 193-209.
    12. Gonzalez-Diaz, Manuel & Solis-Rodriguez, Vanesa, 2012. "Why do entrepreneurs use franchising as a financial tool? An agency explanation," Journal of Business Venturing, Elsevier, vol. 27(3), pages 325-341.
    13. repec:spr:jbecon:v:88:y:2018:i:3:d:10.1007_s11573-017-0870-8 is not listed on IDEAS
    14. Dawson, Alexandra, 2012. "Human capital in family businesses: Focusing on the individual level," Journal of Family Business Strategy, Elsevier, vol. 3(1), pages 3-11.

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