Beyond the usual suspects : impact of private equity on industries and competitors of portfolio companies : evidence from the Norwegian market
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- Master Thesis 
Although much evidence supports that private equity enhances performance for the companies backed by it, many critics claim it destroys value. Numerous concerns also relate to its impact on the economy. Based on this, we go beyond the usual suspects, being portfolio companies, and examine the impact of private equity on industries and the close competitors of portfolio companies. Using a novel dataset of Norwegian buyouts supplied by the Argentum Centre for Private Equity, combined with a dataset on Norwegian corporate accounts compiled by the Centre for Applied Research at NHH, we document this impact. We find that industries experiencing buyout activity outperform industries that do not experience buyout activity. Moreover, findings suggest industries with comparatively high buyout activity outperform industries with lower levels of buyout activity, but the effect disappears when employing detailed industry classifications. This supports the notion of spillover effects. Finally, we find no spillovers to individual competitors, providing evidence that the spillovers are industry wide. Overall, these findings are consistent with the hypothesis that private equity backed companies force industry peers to improve and indicate the effect be industry wide.