Private Equity, Jobs and Productivity: Reply to Davis, Haltiwanger, Handley, Jarmin, Lerner, and Miranda (2018) (A Comment deux)

Abstract

Davis, Haltiwanger, Handley, Jarmin, Lerner, and Miranda (2014) provide evidence that the impact of controversial leveraged buyouts on employment is modest. Our paper challenges this view. We argue that the sample tested in Davis et al. (2014) is not specific to controversial leveraged buyouts as claimed. We show that while the Davis et al. (2014) sample does include some controversial leveraged buyouts, most buyouts tested are growth equity and other private equity investments. Using a new public dataset specific to controversial leveraged buyouts, we show that employment declines are economically significant and worthy of public concern.

Keywords: Leveraged Buyouts, Employment, Private Equity, Growth Equity

JEL Classification: G23, G32, G33, G34, J21, J63