"In perhaps the most extensive study conducted on the issue, the World Economic Forum plans to announce on Friday the results of yearlong examination of 5,000 private equity transactions from 1980 through 2005.While I can not find the actual paper, this is something we talk about regularly in class (under the "who wins and who loses" in mergers and acquisitions section). This fits almost exactly with what we have been saying over the past few years ("close but probably a bit of job loss which is not necessarily bad), so I guess we had something right and was more convincing than this paper by the private equity industry (which may have been a bit biased) that found a 8.4% increase in jobs.
The answer? Well, the study found that private equity does not create more jobs, but the Gordon Gekko stereotype may be too harsh. Companies owned by private equity shed, on average, about 1 percent more jobs than their peers.
The study, “Economic Impact of Private Equity,” was led by Josh Lerner, professor at Harvard Business School, and Steven J. Davis, professor at the University of Chicago’s Graduate School of Business."
BTW if anyone can find the actual article, please send it a link. (here is the session, but no paper.)
Pot script: thanks to Yvonne Kreis who found the papers presented at the session and sent the link. Note: it has other papers linked in the section too.