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When Vultures Bring Blessings: Employment Growth in Japanese Businesses under Private Equity Ownership

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  • Blind, Georg
  • Lottanti von Mandach, Stefania

Abstract

We track the effect of private equity ownership on employment in a methodological setup uniting descriptive analysis with checks for selection effects and causality. Applying this approach to buyout investments in Japan, we find evidence that employment grows significantly under private equity ownership, a finding that is in stark contrast with earlier studies on Anglo-Saxon economies; that the increase is not attributable to selection effects; and that growth rates during the holding period are significantly higher than under the previous ownership. We seek an explanation in the institutional setup and explore the relevance of reputation in transactions with revealed identities.

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  • Blind, Georg & Lottanti von Mandach, Stefania, 2017. "When Vultures Bring Blessings: Employment Growth in Japanese Businesses under Private Equity Ownership," MPRA Paper 77764, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77764
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    Cited by:

    1. Georg D. Blind & Stefania Lottanti von Mandach, 2021. "Of pride and prejudice: agent learning under sticky and persistent stereotype," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(2), pages 381-410, April.

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    More about this item

    Keywords

    employment adjustments; private equity; buyout investments; Japan;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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