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Cornelli, Francesca; Kominek, Zbigniew; Ljungqvist, … - C.E.P.R. Discussion Papers - 2009

We test under what circumstances boards discipline managers and whether such interventions improve performance. We exploit exogenous variation due to the staggered adoption of corporate governance laws in formerly Communist countries coupled with detailed ‘hard’ information about the...

Persistent link: https://www.econbiz.de/10008491717

Incentives to Innovate and the Decision to Go Public or Private

Ferreira, Daniel; Manso, Gustavo; Silva, André C. - C.E.P.R. Discussion Papers - 2010

We model the impact of public and private ownership structures on firms' incentives to choose innovative projects. Innovation requires the exploration of new ideas with potential advantages but unknown probability of success. We show that it is optimal to go public when firms wish to exploit the...

Persistent link: https://www.econbiz.de/10008468600

More Insiders, More Insider Trading: Evidence from Private Equity Buyouts

Acharya, Viral V; Johnson, Tim - C.E.P.R. Discussion Papers - 2007

Recent takeover activity has been characterized by broader participation in acquiror financing on both debt and equity …

Persistent link: https://www.econbiz.de/10005498160

Where Experience Matters: Asset Allocation and Asset Pricing with Opaque and Illiquid Assets

Buss, Adrian; Uppal, Raman; Vilkov, Grigory - C.E.P.R. Discussion Papers - 2015

Alternative assets, such as private equity, hedge funds, and real assets, are illiquid and opaque, and thus pose a challenge to traditional models of asset allocation. In this paper, we study asset allocation and asset pricing in a general-equilibrium model with liquid assets and an alternative...

Persistent link: https://www.econbiz.de/10011184079

Are LPs Funds of Funds? Relationship Building in the Private Equity Industry

Massa, Massimo; Zhang, Hong; Zhou, Xiaolan - C.E.P.R. Discussion Papers - 2015

We investigate an informal yet important mechanism in the private equity industry that helps to reduce uncertainty: relationship building. Based on a large sample of private equity funds over the 1980-2010 period, we find that the general partners strategically allocate good funds to loyal...

Persistent link: https://www.econbiz.de/10011186612

Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyouts

Axelson, Ulf; Jenkinson, Tim; Strömberg, Per Johan; … - C.E.P.R. Discussion Papers - 2012

Private equity funds pay particular attention to capital structure when executing leveraged buyouts, creating an interesting setting for examining capital structure theories. Using a large, detailed, international sample of buyouts from 1980-2008, we find that buyout leverage is unrelated to the...

Persistent link: https://www.econbiz.de/10011083386

Buying to Sell: Private Equity Buyouts and Industrial Restructuring

Norbäck, Pehr-Johan; Persson, Lars; Tåg, Joacim Ingemar - C.E.P.R. Discussion Papers - 2012

We investigate how temporary ownership by private equity firms affects industry structure, competition and welfare. Temporary ownership leads to strong investment incentives because equilibrium resale prices are determined partly by buyers' incentives to block rivals from obtaining assets. These...

Persistent link: https://www.econbiz.de/10011083585

Why are Buyouts Leveraged? The Financial Structure of Private Equity Firms

Axelson, Ulf; Strömberg, Per Johan; Weisbach, Michael - C.E.P.R. Discussion Papers - 2007

This paper presents a model of the financial structure of private equity firms. In the model, the general partner of the firm encounters a sequence of deals over time where the exact quality of each deal cannot be credibly communicated to investors. We show that the optimal financing arrangement...

Persistent link: https://www.econbiz.de/10005661723

Performance Pay, CEO Dismissal, and the Dual Role of Takeovers

Burkart, Mike; Raff, Konrad - C.E.P.R. Discussion Papers - 2012

We propose that an active takeover market provides incentives by offering acquisition opportunities to successful … performance-based pay are non-monotonic in the intensity of the takeover threat. In firms with weak boards, turnover (performance …-based pay) increases (decreases) with the intensity of the takeover threat. When choosing its acquisition policy and the quality …

Persistent link: https://www.econbiz.de/10011083799

The Flattening Firm and Product Market Competition

Guadalupe, Maria; Wulf, Julie - C.E.P.R. Discussion Papers - 2009

This paper establishes a causal effect of product market competition on various characteristics of organizational design. Using a unique panel dataset on firm hierarchies of large U.S. firms (1986-1999) and a quasi-natural experiment (trade liberalization), we find that increasing competition...

Persistent link: https://www.econbiz.de/10005792092