Private Equity and Long-Run Investment : The Case of Innovation

  title={Private Equity and Long-Run Investment : The Case of Innovation},
  author={Josh Lerner and Morten Sorensen and Per Stromberg},
A long-standing controversy is whether LBOs relieve managers from shortterm pressures from public shareholders, or whether LBO funds themselves sacrifice long-term growth to boost short-term performance. We examine one form of long-term activities, namely investments in innovation as measured by patenting activity. Analyzing 472 LBO transactions, we find no evidence of any decrease in these activities. LBO firm patents are more cited (a proxy for economic importance), show no shifts in the… CONTINUE READING
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