When Vultures Bring Blessings: Employment Growth in Japanese Businesses under Private Equity Ownership

Blind, Georg and Lottanti von Mandach, Stefania (2017): When Vultures Bring Blessings: Employment Growth in Japanese Businesses under Private Equity Ownership.

Abstract

We track the effect of private equity ownership on employment in a methodological setup uniting descriptive analysis with checks for selection effects and causality. Applying this approach to buyout investments in Japan, we find evidence that employment grows significantly under private equity ownership, a finding that is in stark contrast with earlier studies on Anglo-Saxon economies; that the increase is not attributable to selection effects; and that growth rates during the holding period are significantly higher than under the previous ownership. We seek an explanation in the institutional setup and explore the relevance of reputation in transactions with revealed identities.

• Item Type: MPRA Paper
• Language: English
• Keywords: employment adjustments; private equity; buyout investments; Japan
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J63 - Turnover ; Vacancies ; Layoffs; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M51 - Firm Employment Decisions ; Promotions

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