49 Pages Posted: 18 Dec 2009 Last revised: 29 Aug 2011
Date Written: March 15, 2010
The growth of the private equity industry has spurred concerns about its potential impact on the economy more generally. This analysis looks across nations and industries to assess the impact of private equity on industry performance. Industries where private equity funds have invested in the past five years have grown more quickly in terms of productivity and employment. There are few significant differences between industries with limited and high private equity activity. It is hard to find support for claims that economic activity in industries with private equity backing is more exposed to aggregate shocks. Robustness tests suggest that the results are not driven by reverse causality. These patterns are not driven solely by common law nations such as the United Kingdom and United States, but also hold in Continental Europe.
Suggested Citation: Suggested Citation
Bernstein, Shai and Lerner, Josh and Sorensen, Morten and Strömberg, Per, Private Equity and Industry Performance (March 15, 2010). Harvard Business School Entrepreneurial Management Working Paper No. 10-045; AFA 2011 Denver Meetings Paper. Available at SSRN: https://ssrn.com/abstract=1524829 or http://dx.doi.org/10.2139/ssrn.1524829