The Impact of Private Equity on Exporting Activity

Academic literature has shed light on many ways in which private equity (PE) investment can stimulate growth and performance improvements in portfolio companies. This article relates to the exporting behaviour of target firms. Specifically, we address the following questions: Is there evidence that PE ownership leads to improvements in exporting both in terms of the decision to begin exporting (propensity) and the intensity of exporting (growth rates in the volume of sales exported into existing and new export markets)? Is there evidence that the extent of and changes in exporting activity following PE-involvement across their range of portfolio firm investment activities results from improvements in financial performance [profitability] and economic performance [productivity]? Firm level relative efficiency is associated with the likelihood to export. Do PE investors provide and facilitate access to capital and resources that better enable their portfolio firms to access foreign markets? Firm level financial constraints are cited as an impediment to exporting. Is there evidence that any improvements in the exporting performance of PE-backed firms is due to the experience, capabilities and networks of the PE investor(s) and their active involvement in management or on company boards post-investment?