1 research outputs found
Agency, strategic entrepreneurship, and the performance of private equity-backed buyouts
Agency theory has focused on buyouts as a governance and control device to increase
profitability, organizational efficiency, and limited attention to growth. A strategic entrepreneurship
view of buyouts incorporates upside incentives for value creation associated with
growth as well as efficiency gains. In this paper, we develop the complementarity between
agency theory and strategic entrepreneurship perspectives to examine the performance
implications for different types of buyouts. Further, we study how the involvement of private
equity (PE) firms is related to the performance of the post-buyout firm. These issues are
examined for a sample of 238 PE-backed buyouts in the UK between 1993 and 2003.
Implications for theory and practice are suggested