63 Pages Posted: 8 Feb 2016 Last revised: 11 Sep 2017
Date Written: September 10, 2017
This paper presents evidence of a large, persistent decline in establishment-level workplace injury rates after private equity (PE) buyouts of publicly-traded firms but not already-private firms. Cross-sectional evidence further links the public-firm post-buyout decline to alleviation of market pressure to focus on short-term performance. Employment drops more in low-injury risk establishments, and the fall in injury rates does not correlate with reductions in employment post-buyout, suggesting that systematic outsourcing of dangerous jobs or underreporting due to layoff concerns is unlikely to explain the results. Overall, our results suggest a novel dimension on which buyouts improve firms' fundamental operational competencies.
Keywords: Private equity buyouts, workplace safety, labor and finance
JEL Classification: G32, J28
Suggested Citation: Suggested Citation
Cohn, Jonathan B. and Nestoriak, Nicole and Wardlaw, Malcolm, Private Equity Buyouts and Workplace Safety (September 10, 2017). Available at SSRN: https://ssrn.com/abstract=2728704 or http://dx.doi.org/10.2139/ssrn.2728704