Private equity (PE) firms influence their buyout targets in many ways. The literature documents that PE improves target firms’ operational practices, productivity, and innovation while cutting existing jobs and creating new ones. It is far less clear whether and how these PE-created effects extend beyond target firms. In a new paper, we examine the spillover effects of PE and investigate whether and how the prior work experience of public firm chief executive officers (CEOs) in PE buyout targets helps shape corporate policies and performance of these CEOs’ current firms.
Our study is, to the best of our knowledge, the first … Read more