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Private Equity and Financial Fragility during the Crisis

Listed author(s):
  • Shai Bernstein
  • Josh Lerner
  • Filippo Mezzanotti

Do private equity firms contribute to financial fragility during economic crises? We find that during the 2008 financial crisis, PE-backed companies increased investments relative to their peers, while also experiencing greater equity and debt inflows. The effects are stronger among financially constrained companies and those whose private equity investors had more resources at the onset of the crisis. PE-backed companies consequentially experienced higher asset growth and increased market share during the crisis.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23626.

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Date of creation: Jul 2017
Handle: RePEc:nbr:nberwo:23626
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