The Real Effects of Private Equity Buyouts

IFN Working Paper No 851

26 Pages Posted: 10 Sep 2010  

Joacim Tåg

Research Institute of Industrial Economics (IFN)

Date Written: September 8, 2010

Abstract

Private equity buyouts have become a common element in the industrial development process. I survey the literature on the real economic effect of buyouts: employment, wages, productivity, and long-run investments. Employment tend to marginally fall after a buyout in most countries studied, with the exception being France. There are clear evidence of productivity gains following a buyout, with part of these being shared with worker through higher wages. The evidence is mixed regarding effects on long-run investments.

Keywords: Employment, Innovation, Leveraged Buyouts, Long-run investments, Private equity buyouts, Productivity, Real effects

JEL Classification: G20, G30, G34, J2, L2

Suggested Citation

Tåg, Joacim, The Real Effects of Private Equity Buyouts (September 8, 2010). IFN Working Paper No 851. Available at SSRN: https://ssrn.com/abstract=1674759 or http://dx.doi.org/10.2139/ssrn.1674759

Joacim Tåg (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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