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Working paper No. 269: A long-term perspective on private equity ownership

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Företagandets villkor, Jönköping International Business School, Louise Nordström, Nationalekonomi
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Abstract

Private equity companies are targets to a never-ending controversy debate about their contribution to the economy. The existing empirical data provide, on the one hand, strong evidence that private equity activity contribute positively to efficiency of companies, but they are often viewed as short-term investors who utilize firms’ resources. In this paper I find no empirical support for that claim. By a unique dataset that covers all majority buyouts in Sweden by Swedish private equity firms from 1997-2010 I end up following 680 portfolio firms before and after the buyout as well as after the exit and a peer group defined by industry, size, age and financial performance. I do, however, find that the firms actually performs better after they exit from the private equity firm, which might be a result of sustainable long-term investments rather than short-termism.

Nordström, L. (2016). A long-term perspective on private equity ownership. Ratio Working Paper No. 269. Stockholm: Ratio.

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Working paper No. 269: A long-term perspective on private equity ownership
Working paperPublication
Nordström, L.
Publication year

2016

Published in

Ratio Working Paper

Abstract

Private equity companies are targets to a never-ending controversy debate about their contribution to the economy. The existing empirical data provide, on the one hand, strong evidence that private equity activity contribute positively to efficiency of companies, but they are often viewed as short-term investors who utilize firms’ resources. In this paper I find no empirical support for that claim. By a unique dataset that covers all majority buyouts in Sweden by Swedish private equity firms from 1997-2010 I end up following 680 portfolio firms before and after the buyout as well as after the exit and a peer group defined by industry, size, age and financial performance. I do, however, find that the firms actually performs better after they exit from the private equity firm, which might be a result of sustainable long-term investments rather than short-termism.

Working paper No. 269: A long-term perspective on private equity ownership
Working paperPublication
Nordström, L.
Publication year

2016

Published in

Ratio Working Paper

Abstract

Private equity companies are targets to a never-ending controversy debate about their contribution to the economy. The existing empirical data provide, on the one hand, strong evidence that private equity activity contribute positively to efficiency of companies, but they are often viewed as short-term investors who utilize firms’ resources. In this paper I find no empirical support for that claim. By a unique dataset that covers all majority buyouts in Sweden by Swedish private equity firms from 1997-2010 I end up following 680 portfolio firms before and after the buyout as well as after the exit and a peer group defined by industry, size, age and financial performance. I do, however, find that the firms actually performs better after they exit from the private equity firm, which might be a result of sustainable long-term investments rather than short-termism.

Ratio Working Paper No. 349: Industrial conflict in essential services in a new era – Swedish rules in a comparative perspective
Working paperPublication
Karlson, N.
Publication year

2021

Published in

Ratio Working Paper

Abstract

This paper examines whether the Swedish regulatory system of dealing with industrial conflicts that affect essential services need an update or reform. Are the existing rules effective in a world where many essential services are upheld by many interdependent agents in complex systems where every single node becomes critical for the functioning of the system, and where the essential service activities could be either private or public? A comparative study is conducted with the corresponding regulatory systems of the United Kingdom, Germany, and Denmark.
The conclusion is that Sweden is a special case. The Swedish protection against and readiness in dealing with societally harmful industrial conflicts in essential services is weaker than in the countries of comparison. Just as in relation to other threats to essential services, it is not sustainable to claim that just because such a threat is not currently present, there would be no need for preparedness.
There are many alternative ways to handle this. Desirable methods should both prevent harmful conflicts from erupting and end conflicts that have grown harmful to society at a later stage. The labour market organisations should have a mutual interest in reforming the rules.

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