Skill, Syndication, and Performance: Evidence from Leveraged Buyouts

56 Pages Posted: 28 May 2014 Last revised: 11 Aug 2019

See all articles by Jared R. Stanfield

Jared R. Stanfield

University of Oklahoma; Financial Research Network (FIRN)

Date Written: August 7, 2019

Abstract

This paper studies why buyout firms syndicate and how this influences buyout performance. I find evidence that skill plays an important role in syndication and its effect on performance. The results suggest low-skill firms utilize syndication to pool skill, resources, and information to overcome firm-specific deficiencies and improve performance, but no such effect exists for high-skill firms. This evidence is robust to potential endogeneity concerns and other alternative explanations. Additionally, this paper is the first to use a robust statistical network methodology studying the formation of syndication networks that allows for a consistent estimation of effects within the network despite the lack of independence among observations.

Keywords: Syndication, Leveraged Buyout, Private Equity, Boundaries of the Firm, Social Networks

JEL Classification: G23, G24, G34

Suggested Citation

Stanfield, Jared R., Skill, Syndication, and Performance: Evidence from Leveraged Buyouts (August 7, 2019). Journal of Corporate Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2442673 or http://dx.doi.org/10.2139/ssrn.2442673

Jared R. Stanfield (Contact Author)

University of Oklahoma ( email )

Norman, OK 73019
United States

HOME PAGE: http://jaredstanfield.com

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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