Private equity found not to contribute to boom & bust after all
| Mar 3rd, 2010 | Filed under: Academic Research, Private Equity, Today's Post | By: Guest |
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By: Konstantin Danilov, CAIA, AllAboutAlpha.com Editorial Board
There has been a lot of debate about the social and economic impact of private equity in recent years. For example, the third paper in the World Economic Forum’s Globalization of Alternative Investments working paper series provides some interesting insights into the macroeconomic impact of private equity. The project – launched in 2007 to provide a “fact-based look” at the global impact of private equity – brought together a team of international scholars to conduct extensive research on the subject.
The paper sets out to answer the following question: does the presence of private equity investment affect the growth rate and cyclicality of the industry where the investment is made? The research focuses specifically on private equity’s impact on productivity, employment and capital formation growth in the industry. The findings are positive, which is good news as private equity continues to face heavy scrutiny from public officials and regulators. More…
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