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Management Buyouts in Times of Economic Policy Uncertainty

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Management Buyouts in Times of Economic Policy Uncertainty. / Hammer, Benjamin; Mettner, Sven; Schweizer, Denis et al.
In: Finance Research Letters, Vol. 52, 103499, 31.03.2023.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Hammer, B, Mettner, S, Schweizer, D & Wünsche, N 2023, 'Management Buyouts in Times of Economic Policy Uncertainty', Finance Research Letters, vol. 52, 103499. https://doi.org/10.1016/j.frl.2022.103499

APA

Hammer, B., Mettner, S., Schweizer, D., & Wünsche, N. (2023). Management Buyouts in Times of Economic Policy Uncertainty. Finance Research Letters, 52, Article 103499. https://doi.org/10.1016/j.frl.2022.103499

Vancouver

Hammer B, Mettner S, Schweizer D, Wünsche N. Management Buyouts in Times of Economic Policy Uncertainty. Finance Research Letters. 2023 Mar 31;52:103499. Epub 2022 Nov 25. doi: 10.1016/j.frl.2022.103499

Author

Hammer, Benjamin ; Mettner, Sven ; Schweizer, Denis et al. / Management Buyouts in Times of Economic Policy Uncertainty. In: Finance Research Letters. 2023 ; Vol. 52.

Bibtex

@article{9ca01d56aad44be4bbb5b907f9a65fcd,
title = "Management Buyouts in Times of Economic Policy Uncertainty",
abstract = "Using a sample of 18,225 global buyouts, we find that management buyouts (MBOs) are significantly more likely to occur if economic policy uncertainty (EPU) increases. This finding is consistent with the idea that EPU provides an opportunity for insiders to capitalize on private information and time the market. Further results suggest that market timing pays off on average. We find that MBOs achieve more favorable buyout prices and greater post-buyout operating improvements than institutional buyouts during times of high EPU. Our results hold when exploiting close national election races as a quasi-natural experiment for EPU.",
keywords = "Private equity (PE), Economic policy uncertainty (EPU), Leveraged buyout, Management buyout, Entrepreneurial finance",
author = "Benjamin Hammer and Sven Mettner and Denis Schweizer and Norbert W{\"u}nsche",
year = "2023",
month = mar,
day = "31",
doi = "10.1016/j.frl.2022.103499",
language = "English",
volume = "52",
journal = "Finance Research Letters",
issn = "1544-6123",
publisher = "Elsevier BV",

}

RIS

TY - JOUR

T1 - Management Buyouts in Times of Economic Policy Uncertainty

AU - Hammer, Benjamin

AU - Mettner, Sven

AU - Schweizer, Denis

AU - Wünsche, Norbert

PY - 2023/3/31

Y1 - 2023/3/31

N2 - Using a sample of 18,225 global buyouts, we find that management buyouts (MBOs) are significantly more likely to occur if economic policy uncertainty (EPU) increases. This finding is consistent with the idea that EPU provides an opportunity for insiders to capitalize on private information and time the market. Further results suggest that market timing pays off on average. We find that MBOs achieve more favorable buyout prices and greater post-buyout operating improvements than institutional buyouts during times of high EPU. Our results hold when exploiting close national election races as a quasi-natural experiment for EPU.

AB - Using a sample of 18,225 global buyouts, we find that management buyouts (MBOs) are significantly more likely to occur if economic policy uncertainty (EPU) increases. This finding is consistent with the idea that EPU provides an opportunity for insiders to capitalize on private information and time the market. Further results suggest that market timing pays off on average. We find that MBOs achieve more favorable buyout prices and greater post-buyout operating improvements than institutional buyouts during times of high EPU. Our results hold when exploiting close national election races as a quasi-natural experiment for EPU.

KW - Private equity (PE)

KW - Economic policy uncertainty (EPU)

KW - Leveraged buyout

KW - Management buyout

KW - Entrepreneurial finance

U2 - 10.1016/j.frl.2022.103499

DO - 10.1016/j.frl.2022.103499

M3 - Journal article

VL - 52

JO - Finance Research Letters

JF - Finance Research Letters

SN - 1544-6123

M1 - 103499

ER -