Private Equity Impact on Corporate Innovation

This paper focuses on the influence of Private Equity (PE) firms on corporate innovation with the purpose of identifying opportunities such as new or enhanced strategies that PE firms would use to in order to increase the success rate of their acquisitions. The paper starts with a comprehensive literature review and creates a strong theoretical foundation about PE Leveraged Buyout (LBO) companies and their impact on corporate innovation. The methods used in this paper are the case study research, which is introduced to create theory [1] and the review-centric research approach of reviewing existing theory and research as well as for creating a new model of variables and relationships [2] that can be used to validate new hypotheses. The paper introduces a new model that is based on data collection from the review of existing theory and research. The model is a collection of variables that are categorized and linked together to depict new relationships that show the PE LBOs’ influence on corporate innovation. The research also identifies inconsistency in the existing research literature as an opportunity for future research. The research is limited by the duration of a semester which is the timeframe allotted to complete the research work. Develop understanding of the reasons some LBOs fail and strategies that will help PE firms increase the success rate of their investments and create a win-win scenario for investors, employees, and the entire value chain. This paper new concepts and ideas are completely derived from the theoretical foundation and the professional experience of the author.