Private Equity Activity and Corporate Governance’s Spillover

Abstract

"The results indicate a strong and significant relationship between private equity activity and corporate governance quality after controlling endogeneity issues. When the private equityinvestment begins earlier, it is more relevant to the corporate governance quality. Foreign private equity investment seems to complement domestic private equity to improve corporate governance in settings with low domestic private equity activity. The experience of the fund that originates the private equity activity is also determinant in the quality of the corporate governance spillover."