Citation

Discussion Paper Details

Please find the details for DP11075 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Private Equity?s Unintended Dark Side: On the Economic Consequences of Excessive Delistings

Author(s): Alexander P. Ljungqvist, Lars Persson and Joacim Tg

Publication Date: January 2016

Keyword(s): delistings, investment, political economy, private equity, productivity and stock market

Programme Area(s): Financial Economics and Industrial Organization

Abstract: Over the past two decades, private equity has contributed to a shrinking of the U.S. stock market. We develop a political economy model of private equity activity to study the wider economic consequences of this trend. We show that private and social incentives to delist firms from the stock market are not always aligned. Private equity firms could inadvertently impose an externality on the economy by reducing citizen-investors? exposure to corporate profits and thus undermining popular support for business-friendly policies. This can lead to long-term reductions in aggregate investment, productivity, and employment.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11075

Bibliographic Reference

Ljungqvist, A, Persson, L and Tg, J. 2016. 'Private Equity?s Unintended Dark Side: On the Economic Consequences of Excessive Delistings'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11075