Private Equity and Long-Run Investment: The Case of Innovation / Josh Lerner, Morten Sørensen, Per Strömberg.

Format:

Book

Author/Creator:

Lerner, Josh.

Contributor:

National Bureau of Economic Research.

Sørensen, Morten.

Strömberg, Per.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14623.

NBER working paper series no. w14623

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Private Equity and Long-Run Investment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

A long-standing controversy is whether LBOs relieve managers from short-term pressures from public shareholders, or whether LBO funds themselves are driven by short-term profit motives and sacrifice long-term growth to boost short-term performance. We investigate 495 transactions with a focus on one form of long-term activities, namely investments in innovation as measured by patenting activity. We find no evidence that LBOs are associated with a decrease in these activities. Relying on standard measures of patent quality, we find that patents granted to firms involved in private equity transactions are more cited (a proxy for economic importance), show no significant shifts in the fundamental nature of the research, and are more concentrated in the most important and prominent areas of companies' innovative portfolios.

Notes:

Print version record

December 2008.