Friday, January 08, 2010
The Impact of Private Equity
In this new working paper, Shai Bernstein, Josh Lerner, Morten Sørensen, and Per Strömberg examine the impact of private equity on industry performance across many nations. They find that industries with active private equity investments in the past five years have experienced more growth in production, value added, and employment. These industries also do not appear to be more volatile than those without private equity investment activity. The results appear to not be a situation of reverse causality, i.e. it's not the case that private equity appears to be investing disproportionately in industries already with rapid growth and low volatility.