How do investment patterns of independent and captive private equity funds differ? Evidence from Germany

Empirical literature emphasizes a positive contribution of private equity investors, which results from their combined provision of capital, monitoring, and management support. The aim of this study is to show that these previous results, which are based mostly on the analysis of US independent closed-end private equity funds, cannot be generalized since the private equity industry should not be treated as homogenous. We argue that it is necessary to distinguish between different types of private equity providers because their differing governance structures, strategic goals and experiences have a decisive influence on their value adding activities. The results of this study—which uses a data set of 179 German private equity-backed companies—are consistent with the conjecture that independent and corporate private equity providers tend to have a more pronounced role in corporate governance and monitoring of the companies they finance, than bank-dependent and governmental funds which often serve only as bridge investors.      

Private benefits from control block trades in the Spanish stock exchange

A control block trade can be explained by the expectation of financial gains, shared by all shareholders, or by the expectation of private benefits, exclusive to the buyer and possibly at the expense of other shareholders’ rents. The market for corporate control contributes to social welfare when it improves the efficiency of the allocation of resources. When the objective of a block transaction is private benefits, social welfare may be negatively impacted as minority shareholders could withdraw from the market. Therefore the estimation of private benefits would allow the efficiency of the market for corporate control to be assessed. Specifically, the aim of this paper is to calculate private benefits in the Spanish market for partial control. Using a sample of partial control transactions over the period 1990–2016, we find that the median of private benefits is negative, therefore it appears that there is no inefficient use of resources in the Spanish partial control market as a whole, however private costs are detected. The variability of private benefits is explained in a significant way by variables related to the control structure of the target firm, such as the controlling position of the buyer after the transaction, the contestability of control and the cross-shareholdings between the buyer and large shareholders. Performance and the size of the firm are significant as well.     

The effects of private equity and venture capital on sales and employment growth in small and medium-sized businesses

We study the effects private equity (PE) and venture capital (VC) financing have on small and mid-sized single entity business establishments from 1995 to 2009. We focus on single entity establishments to cleanly examine the impact of PE and VC financing on establishments’ organic growth. This study reveals that PE and VC financing have positive impacts on single entity business establishments’ net sales and employment growth. The impact of PE financing on establishments’ growth is slower and smaller than VC financing. However, we find that the benefit of PE financing lasts longer than VC financing. We also find that ethnic minority, female, and foreign business owners are less likely to receive PE and VC financing. Finally, we find evidence that although establishments with government contracts are more likely to receive PE and VC financing, those contracts fail to produce marginal post-funding growth and employment benefits.     

The role of consumers' attitude towards economic climate in their reaction to ‘PL-only’ assortments: Evidence from the United States and Spain

Retailers’ assortment rationalisation strategies have found an “ally” in the current global economic crisis. Indeed, retail boycotts of individual brands in economic recession contexts are not uncommon in the CPG industry. In fact, many of the consumers who began buying PLs during the economic recession are continuing their PL behaviour post-recession. So, what is the role of the economic climate in consumers’ reaction– in terms of store loyalty – to retailers’ NB delisting decisions? Is it so relevant? This paper examines how consumers’ attitude towards the economic climate influences his/her reaction to retailers’ strategy of offering ‘PL-only’ assortments in the context of an economic slump (Spain) compared to a context of economic recovery (U.S.). To do so, we have designed a controlled online experiment for two large consumer panels in the Spanish and the U.S. markets. Our results suggest that consumers’ acceptance of ‘PL-only’ assortments is a separate phenomenon rather than merely being a “consequence” of the current economic situation. Nevertheless, in an economic recovery, such ‘PL-only’ assortments do not appear to be the best strategy.     

政治关系“力量”与民营企业价值研究:腐败的调节效应

从社会网络理论的强弱关系视角对2012-2014年福布斯中国富豪榜的企业家及其企业进行了政治关系的度量,检验了腐败是否会调节政治关系"力量"对企业价值的影响。研究发现,企业家本身所具有的政治关系对企业价值具有明显的正向影响作用,关系的"力量"越强,对企业价值的正向影响就越大;与此同时,腐败的出现会强化政治关系"力量"对民营企业价值的影响。通过分组验证发现,这种"力量"在腐败程度较高环境下更易对企业价值产生正向影响,但在腐败程度较低的环境中,政治关系对民营企业价值的影响很多时候并不显著。     

Wheat variety yield data: Do commercial and public performance tests provide the same information?

Wheat yields from reported performance test results are of economic importance to wheat producers, since their profits depend on selecting the optimal variety for their location. However, our data shows differences in absolute and relative wheat yields between commercial and public wheat breeding program's performance test data in Kansas. Newly available data are used to test if the difference in yields arose from potential selectivity bias, and to determine the contribution of private and public wheat breeding programs to varietal yield improvement during 2007–2012. Both Heckman selection models and multiple regression showed no statistical evidence of the potential presence of selectivity bias rather, managerial practices, agronomic conditions, field location, and inherent genetic traits of the seed variety were identify as the source of yield differences.     

Entry and capital structure mimicking in concentrated markets: The role of incumbents’ financial disclosures

We examine whether the public availability of product market incumbents' financial disclosures leads to greater capital structure mimicking of incumbents by entrants. Exploiting a change in disclosure enforcement for German private firms in the mid-2000s, we find entrant-incumbent mimicking rises substantially in concentrated markets once incumbents' financial statements are publicly available. Additional tests exploring potential mechanisms are more consistent with interfirm learning underlying the effect than alternative channels. Our findings shed light on the effects of competitor financial statement disclosure on private firms’ initial financing decisions and highlight how capital structure dependencies among peer firms arise.     

Private label shoppers between fast fashion trends and status symbolism – A customer characteristics investigation

The question who the private label prone consumer is has received a lot of attention in research. While we so far have a good understanding of the private label shopper in the grocery industry, there is limited research in other industries. We assess private label shopper characteristics as a driver of private label choice using a unique data set of an online only fashion retailer covering 68,147 women shoes consumers in Germany. Fashion consumers are faced with a tradeoff between price and seasonality of fashion items as discounts are used to sell last season's stock. We find that private label choice is positively influenced by price orientation and less by discount proneness. Thus, private label shoppers are rather a fashion savvy segment focusing on buying more in season but at a lower price.     

On post-IPO stock price performance: A comparative analysis of RLBOs and IPOs

This is the first study to examine the post-IPO stock price performance by differentiating between IPOs and three types of RLBOs (i.e. public-to-private (or re-IPOs), division-to-private, and private-to-private deals). We document that public-to-private RLBOs outperform their industry rivals, IPOs, mature firms in comparable industries, and a propensity-score matched control group for up to five years post-offering. Further, we document that, within RLBOs, public-to-private RLBOs, outperform private-to-private and division-to-private RLBOs. We also find support for the underwriter signaling effect for public-to-private RLBOs. Our analysis identifies for the first time what private period restructuring activities contribute to superior post-re-IPO stock price performance. Further, the beneficial effects of private period restructurings are enhanced for deals associated with prestigious underwriters. Our findings suggest that first IPOs and re-IPOs differ substantially in term of post-offer performance, the impact of prestigious underwriters on performance, and performance over time.     

Judgment aggregation in search for the truth

We analyze the problem of aggregating judgments over multiple issues from the perspective of whether aggregate judgments manage to efficiently use all voters' private information. While new in judgment aggregation theory, this perspective is familiar in a different body of literature about voting between two alternatives where voters' disagreements stem from conflicts of information rather than of interest. Combining the two bodies of literature, we consider a simple judgment aggregation problem and model the private information underlying voters' judgments. Assuming that voters share a preference for true collective judgments, we analyze the resulting strategic incentives and determine which voting rules efficiently use all private information. We find that in certain, but not all cases a quota rule should be used, which decides on each issue according to whether the proportion of ‘yes’ votes exceeds a particular quota.