Search

This article examines the use of cross-border syndication or international expansion by private equity firms and the decision to syndicate cross-border transactions as a staged process. The article also addresses the effects of human resource availability and changes in legal environments for a private equity firm during entry mode. An overview of the data and methods is presented; the article focuses on British private equity firms investing in Europe. Study findings included the result that firm experience and knowledge with any host country increases investing and that private equity firms with a larger resource base in regards to human resources were less than likely to rely on partners locally when involved with international expansion efforts .

Using a meta-analytical approach, this study reviews the fragmented and contradictory empirical literature on the real effects of private equity (PE) on their portfolio companies, focusing on post-buyout operating performance and employment. Based upon 330 samples including 403,820 firms, we find a positive PE effect on operating performance in the medium-to-long term, but no effect on employment. Interestingly, performance gains are stronger in private-to-private buyouts compared to public-to-private buyouts. Countries with strong investor protection laws or with individualistic cultures facilitate larger operating performance gains, while employees are better off in countries with more stringent employee protection laws or with collectivistic cultures. [ABSTRACT FROM AUTHOR]

Poverty is one of the greatest challenges of our times and microfinance organizations try to help reduce poverty by providing microloans for enterprise development. However, recent studies have demonstrated that the positive impact of microloans on the lives of the poor is generally very limited. In this light, understanding why and how individuals use microloans is an important component of making microlending more effective. In this empirical study, we employ an inductive multiple-case study design to develop an understanding of microloan use among 7 female firm founders in rural South Africa. We found patterned differences in the salience of the firm founders' social identity, the construction of an option set of possible uses for the microloan, and finally the dominant loan utilisation. Our inductive model provides an important extension to the microfinance literature and the emerging stream of theorizing around founder social identities. [ABSTRACT FROM AUTHOR]

This research increases understanding of agency theory by exploring the influence of divergent principal interests in private firms. Investigating unique panel data on employment levels and employment terms in private equity backed family firms (from 1996 to 2013), findings reveal that, when private equity investors acquire minority positions, family control strongly weakens the positive impact of private equity on employment levels. Alternatively, when private equity investors acquire full control, employment levels increase more in previously family controlled firms compared to nonfamily firms. Results further show that neither majority nor minority private equity investments induce significant changes in employment terms such as wages or the usage of temporary contracts, yet highlight some important selection effects. These results hold broad implications for family firms, private equity investors and policy makers. [ABSTRACT FROM AUTHOR]

Previous studies have relied predominantly on agency theory to understand relationships among stakeholders (actors) involved in a leveraged buyout transaction and explain inherent characteristics of LBO debt financing. However, traditional agency theory overlooks structural characteristics like dependencies and power-differentials between principals and agents. Using a multiple-agency framework on a sample of 6,609 LBO loan tranches that were issued during the period 1986-2012, we examine how power dynamics impact contractual outcomes among LBO participants. Our analysis highlights the asymmetric nature of power among agency partners. Agency conflicts are lower when lenders (principals) have a dependence advantage over PE- sponsors (agents) and higher when the latter possess more power in the relationship. [ABSTRACT FROM AUTHOR]

Scholars have stressed that entrepreneurship is a process that is fully embedded in time but how its' temporal character plays out for the entrepreneur remains poorly understood. We theorize that temporal cognitions affect a broad range of entrepreneurial cognitions (e.g. knowledge retrieval, creativity, decision making). We develop a set of propositions to understand the role of temporal cognitions in key aspects of the entrepreneurial process, i.e. opportunity identification, evaluation and exploitation. [ABSTRACT FROM AUTHOR]