The Impact of Private Equity Buyouts on Productivity and Jobs

Saturday August 1, 2020

Abstract

Over the past two decades, the role of private equity in the real economy has dramatically increased. For example, private equity-backed U.S. companies numbered approximately 4,000 in 2006, but by 2018, that figure had doubled to about 8,000. Meanwhile, the number of publicly traded firms in the United States fell by 14 percent, from 5,113 to 4,397. Globally, private equity’s net asset value has jumped more than seven fold from 2000 to 2018, while the market capitalization of the public equity market grew only 2.1 times over the same period. Institutional investors that have historically been public market oriented increasingly allocate investments to private markets, seeing them as necessary vehicles to attain diversification as well as participation in the growth of the full economy.2

Authors

John Gulliver, Program on International Financial Systems
Wei Jiang, Columbia Business School and IPC AMRA Advisory Board