Private Equity Firm Heterogeneity and Cross-Border Acquisitions

Authors

Isaac Holloway, Ivey Business School
Hoan Soo Lee, Tsinghua University
Tao Shen, Tsinghua University

Document Type

Article

Publication Date

7-2016

Volume

44

Journal

International Review of Economics & Finance

First Page

118

URL with Digital Object Identifier

https://doi.org/10.1016/j.iref.2016.04.001

Last Page

141

Abstract

We study the global competition among private equity(PE)buy out firms. Using a detailed database of PE firm characteristics,we investigate how PE firm heterogeneity across strategy and performance affects the volume of global acquisitions. A one-standard-deviation increase in a firm’s average internal rate of return is associated with an approximate doubling of the number of deals in any given country. We also find that transaction costs associated with geographic, cultural, and administrative distance matter to different degrees across PE firms, and that these differences are related to the strategic profiles of the firms.

Notes

This is the author-accepted version of an article published in the International Review of Economics & Finance. The final published version can be found at https://doi.org/10.1016/j.iref.2016.04.001

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