Private Equity, Investment and Financial Constraints - Firm-Level Evidence for France and the United Kingdom
The welfare effects of private equity transactions are debated controversially. We analyze the impact of expansion financing and buyouts by private equity investors on investment of portfolio firms in the UK and France - two countries with different financial systems. Unobserved heterogeneity and the endogeneity of private equity transactions financed by venture capital companies are addressed using dynamic panel data techniques. In both countries we find that portfolio firms display higher investment levels and a lower dependence on internal funds after expansion financing. Buyouts financed by venture capital companies are neither associated with a decrease in investment spending nor with an increase in the dependence on internal finance. In contrary, private equity based buyouts in the UK outperform non-private equity backed British firms in terms of both indicators. Contrasting the notion of several policy makers,we cannot detect that private equity based buyout financing yields higher financial constraints on average
Year of publication: |
2009
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Authors: | Engel, Dirk |
Other Persons: | Stiebale, Joel (contributor) |
Publisher: |
[2009]: [S.l.] : SSRN |
Subject: | Frankreich | France | Großbritannien | United Kingdom | Private Equity | Private equity | Investition | Investment | Liquiditätsbeschränkung | Liquidity constraint | Unternehmenserfolg | Firm performance | Vergleich | Comparison |
Saved in:
freely available
Extent: | 1 Online-Ressource (42 p) |
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Series: | Ruhr Economic Paper ; No. 126 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 1, 2009 erstellt |
Other identifiers: | 10.2139/ssrn.1491605 [DOI] |
Classification: | G32 - Financing Policy; Capital and Ownership Structure ; D92 - Intertemporal Firm Choice and Growth, Investment, or Financing ; G23 - Pension Funds; Other Private Financial Institutions |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013155410