The Fruits Of Iterative Learning And Negative Performance Feedbacks: Evidence From Private Equity Backed Buyouts
We open up the black box of learning from experience by building upon the emerging stream of research on learning from performance feedbacks. We go beyond prior research that has regarded experience as a homogenous construct by introducing and theorizing three specific attributes of experience: the quantity of performance feedbacks, the incompleteness of performance feedbacks and the proportion of negative performance feedbacks. We test specific hypotheses regarding the joint impact of these three factors on performance using a novel, proprietary dataset relating to the private equity industry. Largely in line with our expectations, we find that performance feedbacks quantity and incompleteness have a negative impact on performance, and that these negative impacts are alleviated by the proportion of negative performance feedbacks received.
|Date of creation:||Feb 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: ++ 32 (0) 9 264 34 61
Fax: ++ 32 (0) 9 264 35 92
Web page: http://www.ugent.be/eb
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kaplan, Steve & Schoar, Antoinette, 2004.
"Private Equity Performance: Returns, Persistence and Capital Flows,"
4446-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Steven N. Kaplan & Antoinette Schoar, 2005. "Private Equity Performance: Returns, Persistence, and Capital Flows," Journal of Finance, American Finance Association, vol. 60(4), pages 1791-1823, 08.
- Ulrike Malmendier & Geoffrey Tate, 2005. "Does Overconfidence Affect Corporate Investment? CEO Overconfidence Measures Revisited," European Financial Management, European Financial Management Association, vol. 11(5), pages 649-659.
- Steven N. Kaplan & Per Stromberg, 2009.
"Leveraged Buyouts and Private Equity,"
Journal of Economic Perspectives,
American Economic Association, vol. 23(1), pages 121-46, Winter.
- Ulrike Malmendier & Geoffrey Tate, 2004.
"CEO Overconfidence and Corporate Investment,"
NBER Working Papers
10807, National Bureau of Economic Research, Inc.
- Mike Wright & John Gilligan & Kevin Amess, 2008. "The economic impact of private equity: what we know and what we would like to know," Venture Capital, Taylor & Francis Journals, vol. 11(1), pages 1-21, March.
- Hausman, Daniel M, 1989. "Economic Methodology in a Nutshell," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 115-27, Spring.
- Mike Wright & Andy Lockett, 2003. "The Structure and Management of Alliances: Syndication in the Venture Capital Industry," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 2073-2102, December.
- Heath, Chip & Tversky, Amos, 1991. " Preference and Belief: Ambiguity and Competence in Choice under Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 5-28, January.
- Ludovic Phalippou & Oliver Gottschalg, 2009.
"The Performance of Private Equity Funds,"
Review of Financial Studies,
Society for Financial Studies, vol. 22(4), pages 1747-1776, April.
- Cressy, Robert & Munari, Federico & Malipiero, Alessandro, 2007. "Playing to their strengths? Evidence that specialization in the private equity industry confers competitive advantage," Journal of Corporate Finance, Elsevier, vol. 13(4), pages 647-669, September.
- Itzhak Ben-David & John R. Graham & Campbell R. Harvey, 2007. "Managerial Overconfidence and Corporate Policies," NBER Working Papers 13711, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:12/770. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nathalie Verhaeghe)
If references are entirely missing, you can add them using this form.