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Private equity and workers’ career paths: the role of technological change

Agrawal, Ashwini and Tambe, Prasanna (2016) Private equity and workers’ career paths: the role of technological change. Review of Financial Studies, 29 (9). pp. 2455-2489. ISSN 0893-9454

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Identification Number: 10.1093/rfs/hhw025

Abstract

We analyze a new dataset on workers’ career paths to examine whether private equity (PE) investments can have positive spillover effects on workers. We study leveraged buyouts in the context of recent information technology (IT) diffusion, and find evidence supporting the argument that many employees of companies acquired by PE investors gain transferable, IT-complementary human capital. Our estimates indicate that these workers experience increases in both long-run employability and wages relative to what they would have realized in the absence of PE investment. The findings underscore PE’s role in mitigating the effects of workforce skill obsolescence resulting from technological change.

Item Type: Article
Official URL: https://academic.oup.com/rfs
Additional Information: © 2016 The Authors
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HG Finance
JEL classification: G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General
G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting; Fixed Investment and Inventory Studies
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M51 - Firm Employment Decisions; Promotions (hiring, firing, turnover, part-time, temporary workers, seniority issues)
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M54 - Labor Management (team formation, worker empowerment, job design, tasks and authority, work arrangemetns, job satisfaction)
Sets: Departments > Finance
Collections > Economists Online
Date Deposited: 16 Feb 2017 10:00
Last Modified: 02 Nov 2017 15:32
URI: http://eprints.lse.ac.uk/id/eprint/69476

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