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The Real Effects of Private Equity Buyouts

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  • Tåg, Joacim

    (Research Institute of Industrial Economics (IFN))

Abstract

Private equity buyouts have become a common element in the industrial development process. I survey the literature on the real economic effect of buyouts: employment, wages, productivity, and long-run investments. Employment tend to marginally fall after a buyout in most countries studied, with the exception being France. There are clear evidence of productivity gains following a buyout, with part of these being shared with worker through higher wages. The evidence is mixed regarding effects on long-run investments.

Suggested Citation

  • Tåg, Joacim, 2010. "The Real Effects of Private Equity Buyouts," Working Paper Series 851, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0851
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    More about this item

    Keywords

    Employment; Innovation; Leveraged Buyouts; Long-run investments; Private equity buyouts; Productivity; Real effects;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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