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Article
Publication date: 24 July 2023

Vrinda Rawal and Sheeba Kapil

This paper aims to review, systematize and map the extant literature on private equity (PE) and study the underlying research agenda for investment selection and value creation in…

Abstract

Purpose

This paper aims to review, systematize and map the extant literature on private equity (PE) and study the underlying research agenda for investment selection and value creation in portfolio firms of PE investors. The PE investment process entails the preinvestment stage, where PE investors screen the target firms, and the postinvestment stage, where PE investors monitor the funded firms. With the motive to understand both stages, this review consolidates the findings of existing literature.

Design/methodology/approach

This research adopts a systematic literature review approach to study the underlying themes in PE investment literature. To adequately profile the key research areas, the authors have adopted citation classics in addition to keyword search and drawn the most significant papers in this field of research based on citation metrics.

Findings

The review presents a heterogeneous set of themes by encapsulating the relevant PE literature and identifies significant and emergent themes within the broad research area of investment and performance. The foundational themes found are selection determinants for PE investments, value creation in PE investments and selection vs value-adding effect of PE investors. While the emergent themes are the relative performance of PE investments; sources of value creation; skill, luck and social capital in PE; and resource dependency vis-à-vis PE. Each theme or subtheme chalks out the underlying research agendas for future researchers.

Originality/value

To build an understanding of the selection determinants and value creation, this review addresses the need to synthesize and align the PE literature concerning pre and post investment stages. PE is a fertile research area that is systematically captured in this review by identifying themes, subthemes and avenues for future research.

Details

Journal of Indian Business Research, vol. 15 no. 4
Type: Research Article
ISSN: 1755-4195

Keywords

Book part
Publication date: 24 August 2023

Timo Paumen, David P. Kroon and Svetlana N. Khapova

While Merger & Acquisition (M&A) activity has reached unprecedented levels over recent years, M&A failure rates remain high. Yet, there is growing evidence that private equity…

Abstract

While Merger & Acquisition (M&A) activity has reached unprecedented levels over recent years, M&A failure rates remain high. Yet, there is growing evidence that private equity funds show high success rates. As little is known about the differences between different types of buyers, and only scant information exists on private equity funds’ operations, we inductively explore the reasons for their outperformance. In this qualitative study, we identify three characteristics (i.e., organizational set-up, private equity investors’ professional identities, and an integrative work approach), which we brought together into a theoretical framework that explains how private equity professionals can enable better M&A performance. Finally, our findings underline the effectiveness of specific incentivization approaches applied in private equity funds.

Article
Publication date: 19 February 2024

Ming-Chang Wang, Yu-Feng Hsu and Hsiang-Ying Chien

This study investigates the media activities of firms issuing private equity placements and seasoned equity offerings in Taiwan, as firms have incentives to manage media coverage…

Abstract

Purpose

This study investigates the media activities of firms issuing private equity placements and seasoned equity offerings in Taiwan, as firms have incentives to manage media coverage to influence their stock prices during private equity placement.

Design/methodology/approach

We collect a corpus of news stories and transform the news into term sets based on the part of speech. Then, we refer to Cecchini et al. (2010) to classify the news terms into positive, negative, and usual categories. Next, we employ the SVM algorithm to perform the classification tasks and the term frequency method to perform the text mining task. In last, we use a multiple regression model to verify the hypotheses.

Findings

We determine that issuing firms in a private placement have substantially more positive news stories and fewer negative news stories than those in public offerings. Furthermore, we evidence that the media management effects of postequity issues are more active than those of preequity issues. Finally, our results demonstrate that the timing and content of financial media coverage among different equity issuance methods may be biased by firm management. According to previous studies, they may attempt to manipulate stock prices to increase the number of highly profitable insider stakeholders.

Originality/value

To our knowledge, this is the first study to investigate that if private placement will associate with more active media management than the public offerings. According to our results of the difference-in-means test, the public offerings market may control news coverage; however, this result is inconsistent with that of the regression results. The private placements market may also exercise media management in the “before announcement day” and “after announcement day” periods by increasing positive news and reducing negative news.

Details

Journal of Accounting Literature, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-4607

Keywords

Open Access
Article
Publication date: 28 March 2022

Murad Harasheh and Francesca De Vincenzo

The study introduces a new approach to leverage-value relationship. Besides applying the classical regression models, the study deals with leverage as a continuous treatment…

1299

Abstract

Purpose

The study introduces a new approach to leverage-value relationship. Besides applying the classical regression models, the study deals with leverage as a continuous treatment variable implemented on the firm’s value using the dose-response function (DFR).

Design/methodology/approach

After proper model calibration and splitting the treatment (leverage) into ten doses, a response function is generated, which enables the realization of the dose level at which the firm’s value is maximized. Furthermore, the study tests the pecking order theory (POT) and the trade-off theory (TOT) using the threshold model to see whether firms are under or over-indebted. The analysis is carried out on panel data from small-medium enterprises (SMEs), providing more valuable insights than large and mature companies.

Findings

The study used two leverage measures: total liabilities ratio and bank debt ratio. Value is measured by the market capitalization and Tobin’s Q. In general, the study finds a positive relationship between leverage and value; POT is not strongly supported, firms are below their optimal leverage and there is a certain leverage dose that would maximize firms’ value.

Practical implications

Since the threshold model and DRF show that SMEs are under-indebted, firms could benefit from extra leverage doses without affecting the firm’s risk profile, especially in a low-interest rate regime, and the potential increase in public-private expenditure after Italy obtained the European Recovery Funds.

Originality/value

The study contributes to new knowledge and understanding of financial leverage from new methodological perspectives, offering valuable insights from SMEs using novel approaches.

Details

EuroMed Journal of Business, vol. 18 no. 2
Type: Research Article
ISSN: 1450-2194

Keywords

Book part
Publication date: 7 February 2024

Anne M. Hewitt

At the beginning of the 21st century, multiple and diverse social entities, including the public (consumers), private and nonprofit healthcare institutions, government (public…

Abstract

At the beginning of the 21st century, multiple and diverse social entities, including the public (consumers), private and nonprofit healthcare institutions, government (public health) and other industry sectors, began to recognize the limitations of the current fragmented healthcare system paradigm. Primary stakeholders, including employers, insurance companies, and healthcare professional organizations, also voiced dissatisfaction with unacceptable health outcomes and rising costs. Grand challenges and wicked problems threatened the viability of the health sector. American health systems responded with innovations and advances in healthcare delivery frameworks that encouraged shifts from intra- and inter-sector arrangements to multi-sector, lasting relationships that emphasized patient centrality along with long-term commitments to sustainability and accountability. This pathway, leading to a population health approach, also generated the need for transformative business models. The coproduction of health framework, with its emphasis on cross-sector alignments, nontraditional partner relationships, sustainable missions, and accountability capable of yielding return on investments, has emerged as a unique strategy for facing disruptive threats and challenges from nonhealth sector corporations. This chapter presents a coproduction of health framework, goals and criteria, examples of boundary spanning network alliance models, and operational (integrator, convener, aggregator) strategies. A comparison of important organizational science theories, including institutional theory, network/network analysis theory, and resource dependency theory, provides suggestions for future research directions necessary to validate the utility of the coproduction of health framework as a precursor for paradigm change.

Open Access
Article
Publication date: 20 March 2023

Richard D. Simmons and Nigel Culkin

Economic progress requires both creating new industries – defined as economic development – and developing existing ones – called economic growth. This policy brief sets out an…

Abstract

Economic progress requires both creating new industries – defined as economic development – and developing existing ones – called economic growth. This policy brief sets out an economic development framework to integrate entrepreneur, university, private risk capital and state actions to enable suitable firms to grow into global successes as they transform technologies and markets.

Details

Emerald Open Research, vol. 1 no. 13
Type: Research Article
ISSN: 2631-3952

Keywords

Article
Publication date: 18 September 2023

Patrick Velte

To the best of the author’s knowledge, the author conducts the first detailed review on the impact of ownership variables on corporate tax avoidance, based on 69 archival studies…

Abstract

Purpose

To the best of the author’s knowledge, the author conducts the first detailed review on the impact of ownership variables on corporate tax avoidance, based on 69 archival studies over the two last decades.

Design/methodology/approach

Referring to an agency-theoretical framework, the author differentiates between six categories of ownership (institutional, state, family, foreign, managerial and cross-ownership/ownership concentration). The author also includes research on ownership proxies as moderators of other determinants of tax avoidance.

Findings

The review indicates that most research refers to institutional, state and family ownership. Moreover, except for state ownership, no clear tendencies on the impact of included ownership types can be found in line with the author’s agency-theoretical framework.

Research limitations/implications

Regarding research recommendations, among others, the author stresses the urgent need for recognizing heterogeneity within and interactions between ownership proxies. Researchers should also properly address endogeneity concerns by advanced econometric models (e.g. by the difference-in-difference approach).

Practical implications

As international standard setters have implemented massive reform initiatives on both tax avoidance and corporate governance, this literature review underlines the huge interaction between those topics. Firms should carefully analyze their ownership structure and change their tax planning due to owners' individual tax preferences.

Originality/value

This analysis makes useful contributions to prior research by focusing on six categories of ownership and their impact on tax avoidance in (multinational) firms and moderating effects. The author provides a detailed overview about current archival research and likes to guide researchers to focus on ownership heterogeneity and endogeneity concerns.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

Keywords

Open Access
Article
Publication date: 14 December 2021

Torbjörn Ljungkvist and Börje Boers

The purpose of this study is to understand venture capital family businesses (VCFBs) governance of portfolio companies through the deal process.

1492

Abstract

Purpose

The purpose of this study is to understand venture capital family businesses (VCFBs) governance of portfolio companies through the deal process.

Design/methodology/approach

This study applies a theory-developing approach. A model of VCFB governance is developed whose key aspects are illuminated by four examples (cases) of VCFBs.

Findings

Recent research suggests that a venture capital firm's corporate deal processes can be divided into the pre-deal, deal and post-deal phases. Based on the age, size and succession dimensions, propositions for how a governance trajectory develops for VCFBs, affecting the deal process of target family firms (TFFs), are presented. These propositions highlight how the family owners' actions and behavior are related to VCFB governance, which in turn, influences the three phases involved in making an investment.

Originality/value

The propositions suggest how personal and administrative VCFBs' governance of the deal process of portfolio companies is significantly affected by centrifugal and centripetal forces that drive the respective types of governance where third-generation family owners appear as changers of governance approach.

Details

Journal of Family Business Management, vol. 13 no. 2
Type: Research Article
ISSN: 2043-6238

Keywords

Open Access
Article
Publication date: 19 October 2022

Habibah Solehah Ramli, Md. Faruk Abdullah and Md. Kausar Alam

Islamic crowdfunding, an alternative way to finance social projects, is a new development in Malaysia. Little is known about its operation. This study aims to explore the practice…

4948

Abstract

Purpose

Islamic crowdfunding, an alternative way to finance social projects, is a new development in Malaysia. Little is known about its operation. This study aims to explore the practice of Nusa Kapital, the first Islamic crowdfunding platform in Malaysia.

Design/methodology/approach

This study adopted a descriptive approach. The data was collected through document analysis and interviews with two officials of Nusa Kapital. The data gathered was analyzed through the thematic analysis technique.

Findings

This research discovered that Nusa Kapital was established considering the financing needs of the growing number of small medium enterprises (SMEs) in Malaysia. It uses the murabahah concept to make financing arrangements for entrepreneurs. Murabahah is a debt-based concept where the investors, instead of giving cash to the entrepreneurs, purchase an asset and sell it to them at a cost-plus profit. The Securities Commission Malaysia (SCM) regulates the crowdfunding operation of Nusa Kapital, which sets guidelines for the different types of investors, entrepreneurs and platforms. Nusa Kapital conducts an extensive background check of the company for its creditworthiness and takes the necessary measures for the transparency of the project's operation.

Research limitations/implications

This study has unique implications for the regulatory authorities and practitioners in Malaysia and global industries. The study explored the practical scenario of the crowdfunding institution, which will be beneficial for similar industries within and outside of the country.

Originality/value

While previous literature provides a theoretical discussion of Islamic crowdfunding, this study contributes to the body of knowledge by demonstrating its practice.

Details

Asian Journal of Accounting Research, vol. 8 no. 2
Type: Research Article
ISSN: 2443-4175

Keywords

Book part
Publication date: 29 May 2023

Shalini Mittal, Shivani Chaudhry and Shailesh Singh Bhadauria

Introduction: Banking institutions are instrumental for lending support and steering the economy in the planned direction to achieve long-term goals. Sustainable development has…

Abstract

Introduction: Banking institutions are instrumental for lending support and steering the economy in the planned direction to achieve long-term goals. Sustainable development has become the focal point of new policies so that the economies attain inclusive growth. This needs substantial funding to accelerate industrial activity; hence, banks have to play a dominant role in helping such plans succeed. Banks need to look beyond their current framework and play a proactive role in promoting sectors focussed on sustainable development. Banks can prioritise lending to green initiatives to reduce carbon footprint, which will provide impetus to the goals laid out in the COP 26 United Nations (UN) Climate Change Conference. The chapter aims to identify the gap in investment for sustainable development and the funding support required from banks to help India achieve the desired sustainable goals. The chapter recommends that banks increase their green financing to provide the impetus for creating sustainable infrastructure.

Purpose: The present study aims to understand the banking sector’s importance in developing sustainable economic growth through lending practices. The study recommends certain practices for increasing focussed lending towards sustainable projects.

Methodology: In this study, the authors developed prepositions based on a literature review. Significant issues were raised based on the lending policies per the guidelines of Reserve Bank of India (RBI), and a solution was proposed by preparing a conceptual model.

Findings: The study offers a lending technique that can assist the financial sector in supporting sustainable economic growth.

Details

Smart Analytics, Artificial Intelligence and Sustainable Performance Management in a Global Digitalised Economy
Type: Book
ISBN: 978-1-83753-416-6

Keywords

1 – 10 of over 4000