Does Firm Size Matter? Measuring the Operational Performance Development in Management Buyouts

Sammanfattning: This thesis seeks to identify the determinants of operational performance in management buyouts (MBOs) and examine whether there are any differences in operational performance for MBOs of different sizes. This is done by analyzing a novel data sample comprising 116 consecutive Swedish MBOs using a linear regression model. We find that private equity (PE) backed MBOs grow at a higher rate than non-PE backed MBOs, but have a negative impact on the operational efficiency within the firm. Additionally, we find that a high management equity stake correlates with a high operational efficiency development. However, the results reveal no differences in operational performance depending on the size of the MBO, suggesting there is no optimal size category in which an MBO can be particularly effective.