Private Equity, Jobs, and Productivity: A Comment
25 Pages Posted: 11 Oct 2017 Last revised: 6 Sep 2018
Date Written: October 10, 2017
Davis et al. (2014) provide evidence that the impact of leveraged buyouts on employment is quite modest. We challenge this view. We illustrate that the documented job creation is the artifact of deviating from Census data event time and selecting October. Moreover, job destruction is potentially underestimated due to four deviations from established practices: (1) failing to specifically identify leveraged buyouts; (2) including secondary buyouts; (3) testing treated establishments while no longer treated; and (4) failing to consider bankruptcies. Finally, Census data under represents controversial larger public-to-private leveraged buyouts. Nonetheless, we applaud efforts to bring data to these sensitive issues.
Keywords: leveraged buyouts, employment, private equity, growth equity
JEL Classification: G23, G32, G33, G34, J21, J63
Suggested Citation: Suggested Citation