The European private equity market (management buy-outs and buy-ins) has grown in prominence over recent years with CMBOR figures showing the numbers of deals conducted rising from 1212 in 1998 to 1436 by the end of 2007. One of the most important features of this market has been the growth in...

Private equity is invested mostly in established firms, of which family businesses are the dominant form. Under the pecking order hypothesis, private equity is a finance of last resort. Tests of the pecking order and its assumptions have provided conflicting results. For family firms, the...