Cross-Border Leveraged Buyouts

We study the global competition among private equity (PE) buyout firms. Using a detailed data set of PE firm characteristics, we investigate how PE firm heterogeneity across strategy and performance affects the volume of cross-border acquisitions. A one-standard-deviation increase in performance is associated with an approximate doubling of the number of deals in a given country. We also find that transaction costs associated with geographic, cultural, and administrative distance matter to different degrees for different PE firms, and that these differences are related to fundamental characteristics of the firms