International Review of Economics & Finance
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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.
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