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Private Equity Investments and Disclosure Policy

Listed author(s):
  • C. Beuselinck

    (LEM - Lille - Economie et Management - Université de Lille, Sciences et Technologies - Fédération Universitaire et Polytechnique de Lille - Université de Lille, Sciences Humaines et Sociales - CNRS - Centre National de la Recherche Scientifique)

  • M. Deloof
  • S. Manigart

We investigate whether a firm’s disclosure policy is affected by the changing corporate setting and intensified corporate governance associated with private equity (PE) investments. For a unique sample of unquoted PE backed firms we observe a significant switch to increased financial disclosure in the pre-investment year, consistent with the hypothesis that entrepreneurs attempt to reduce information asymmetries inherent to the PE application by increasing their disclosure levels. Further, we document that the governance and professionalization impact of PE investors affects their portfolio firms’ financial disclosure positively. Finally, differentiating on investor type (government versus non-government related) reveals no overall effect on disclosure, both in the pre- as in the post-investment years. Results are robust to various sensitivity checks.

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Paper provided by HAL in its series Post-Print with number hal-00677526.

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Date of creation: 2008
Publication status: Published in European Accounting Review, Taylor & Francis (Routledge): SSH Titles, 2008, 17 (4), pp.609-634
Handle: RePEc:hal:journl:hal-00677526
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00677526
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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