Private Equity and Financial Fragility During the Crisis

59 Pages Posted: 19 Oct 2019

See all articles by Shai Bernstein

Shai Bernstein

Stanford Graduate School of Business

Josh Lerner

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER)

Filippo Mezzanotti

Kellogg School of Management - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: July 18, 2017

Abstract

Do private equity firms contribute to financial fragility during economic crises? We find that during the 2008 financial crisis, PE-backed companies increased investments relative to their peers, while also experiencing greater equity and debt inflows. The effects are stronger among financially constrained companies and those whose private equity investors had more resources at the onset of the crisis. PE-backed companies consequentially experienced higher asset growth and increased market share during the crisis.

JEL Classification: E32, G24

Suggested Citation

Bernstein, Shai and Lerner, Josh and Mezzanotti, Filippo, Private Equity and Financial Fragility During the Crisis (July 18, 2017). Available at SSRN: https://ssrn.com/abstract=3004594 or http://dx.doi.org/10.2139/ssrn.3004594

Shai Bernstein

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Josh Lerner (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6065 (Phone)
617-496-7357 (Fax)

HOME PAGE: http://www.people.hbs.edu/jlerner/

Harvard University - Entrepreneurial Management Unit

Cambridge, MA 02163
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Filippo Mezzanotti

Kellogg School of Management - Department of Finance ( email )

Evanston, IL 60208
United States

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