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Does culture affect the performance of private equity buyouts?

  • This paper uses GLOBE’s performance orientation (PO) dimension to iestigate the relationship between national culture and private equity (PE) performance. We argue that high PO has negative performance implications as it provides the lowest potential for portfolio firms to benefit from a spillover of the distinct PE performance focus, and vice versa. To test this hypothesis, we analyze operating performance metrics of 946 deals from 26 European countries and exit channels of 5093 global deals from 67 countries. Consistent with the “spillover hypothesis”, we find that higher levels of PO are detrimental to efficiency improvements and increase the probability for unsuccessful exits. These findings hold after addressing endogeneity concerns, confounding and measurement error

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Document Type:Article
Author:Benjamin HammerORCiD, Heiko Hinrichs, Bernhard SchwetzlerORCiD
Chairs and Professorships:Chair of Financial Management
Center:Center for Corporate Transactions and Private Equity (CCTPE)
Parent Title (English):Journal of Business Economics : JBE = Zeitschrift für Betriebswirtschaft : ZfB
Year of Completion:2018
First Page:393
Last Page:469
Tag:Culture; Exit channel; Leveraged buyouts; Operating performance; Private equity
Content Focus:Academic Audience
Peer Reviewed:Yes
Rankings:AJG Ranking / 2
VHB Ranking / B
SJR Ranking / Q2
Licence (German):License LogoUrheberrechtlich geschützt