Does Private Equity Affect Firm and Inventor Performance in Pursuing Innovation?
Sammanfattning: This thesis investigates the effect of leveraged buyouts on target firms' innovation performance with the purpose of providing insights into the debate on whether private equity contributes with long-term value to portfolio companies. We construct a sample of 1,186 U.S. target firms in the years 1981-2008 and examine patent-based metrics around the time of the LBO to evaluate changes in patent performance. We find significant evidence indicating that private equity targets produce patents of higher quality after the takeover, achieved through increased performance of inventors staying with the target firm after the transaction. Our results are informative both for policy makers in regard to private equity as well as for other stakeholders of a firm approaching a potential takeover.
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