Private Equity in the Global Economy: Evidence on Industry Spillovers

57 Pages Posted: 17 Oct 2018 Last revised: 22 Aug 2019

See all articles by Serdar Aldatmaz

Serdar Aldatmaz

George Mason University - Department of Finance

Gregory W. Brown

University of North Carolina (UNC) at Chapel Hill - Finance Area

Date Written: July 29, 2019

Abstract

Using a novel dataset on global private equity investments in 19 industries across 52 countries, we find that labor productivity, employment, profitability, and capital expenditures increase for publicly-listed companies in the same country and industry as private equity investments. Our results show that positive externalities created by private equity firms are absorbed by other companies within the same industry. Consistent with prior literature on competitive spillovers, these effects are more pronounced in country-industries with higher levels of competition, stronger institutions, and moderate levels of technological development suggesting that the competitive pressures from private equity-backed firms cause industry peers to react.

Keywords: private equity, venture capital, productivity spillovers, industry growth

JEL Classification: G23, G24, G30, O40

Suggested Citation

Aldatmaz, Serdar and Brown, Gregory W., Private Equity in the Global Economy: Evidence on Industry Spillovers (July 29, 2019). UNC Kenan-Flagler Research Paper No. 2013-9; 29th Annual Conference on Financial Economics & Accounting 2018. Available at SSRN: https://ssrn.com/abstract=2189707 or http://dx.doi.org/10.2139/ssrn.2189707

Serdar Aldatmaz (Contact Author)

George Mason University - Department of Finance ( email )

Fairfax, VA 22030
United States

Gregory W. Brown

University of North Carolina (UNC) at Chapel Hill - Finance Area ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

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