The macroeconomic determinants of private equity investment: a European comparison

Bernoth, Kerstin; Colavecchio, Roberta

doi:10.1080/00036846.2013.866306

Cited by 24 publications

(29 citation statements)

References 24 publications

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“…As described in Table 3, our research and methodology are inspired by the work of Black and Gilson [17], Gompers and Lerner [18], Jeng and Wells [19], Romain and La Potterie [20], Félix et al [21], and Bernoth and Colavecchio [22]. These research studies mainly focus on the phenomenon of venture capital in developed countries.…”

Section: Literature Reviewmentioning

confidence: 99%

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Challenges to Scaling Sustainable Private Equity Markets in Emerging Europe

Precup

2019

Sustainability

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The objective of this paper is to identify the main barriers to sustainable private equity market development in emerging European countries. The cross-country panel data analysis that was used in this paper will focus on the main determinants of the private equity investments over the period 2000-2013. We followed the methodology developed by Gompers and Lerner in order to estimate a panel data model with fixed and random effects. Starting from the existing literature, we analyzed variables that were confirmed by the previous studies and we also introduce new variables, such as the corruption index, uncertainty index, and regulation. The results of our study confirmed the existing hypothesis regarding the barriers to private equity development, such as the unemployment rate, the lack of exit mechanisms due to the low level of market capitalization, and the corruption.Abstract: The objective of this paper is to identify the main barriers to sustainable private equity market development in emerging European countries. The cross-country panel data analysis that was used in this paper will focus on the main determinants of the private equity investments over the period 2000-2013. We followed the methodology developed by Gompers and Lerner in order to estimate a panel data model with fixed and random effects. Starting from the existing literature, we analyzed variables that were confirmed by the previous studies and we also introduce new variables, such as the corruption index, uncertainty index, and regulation. The results of our study confirmed the existing hypothesis regarding the barriers to private equity development, such as the unemployment rate, the lack of exit mechanisms due to the low level of market capitalization, and the corruption.

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Section: Literature Reviewmentioning

confidence: 99%

“…The recent work by Bernoth and Colavecchio [22] compared the determinants of the private equity market in Eastern European countries with those of Western European countries. The authors used a panel data estimate to analyze 14 countries between 2001 and 2008.…”

Section: Literature Review For the Private Equity Investments In Eastmentioning

confidence: 99%

Challenges to Scaling Sustainable Private Equity Markets in Emerging Europe

Precup

2019

Sustainability

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“…Private equity was more accessible in countries with well-developed stock markets. Bernoth and Colavecchio (2014) studied the macroeconomic determinants of private equity investment by comparing 16 Central and Eastern European (CEE) and Western European countries from 2001 to 2011. By applying the extreme bound analysis, their results suggested that GDP per capita, commercial bank lending, inflation rate and equity market capitalisation were significant determinants of PE activity.…”

Section: Theoretical and Literature Reviewmentioning

confidence: 99%

“…Most research on the determinants of private equity activity has been on developed countries. Among them are the studies of Groh and Liechtenstein (2010), Kelly (2012), Aizenman and Kendall (2008), Clarysse, Knockaert, & Wright (2009), Guler and Guillé n (2010), Cherif and Gazdar (2011), Fé lix, Pires and Gulamhussen (2013), Oino (2014) and Bernoth and Colavecchio (2014). However, Oni (2017) conducted a study on the determinants of venture capital supply in Sub-Saharan Africa.…”

Section: Introductionmentioning

confidence: 99%

Macroeconomic Drivers of Private Equity Penetration in Sub-Saharan African Countries

Nkam¹,

Akume²,

Sama³

2019

IBR

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The objective of this study is to investigate in to the drivers of private equity penetration in Cameroon, Nigeria, Ghana, Kenya and South Africa. Secondary data was collected from private equity and venture capital data bases (CapitalIQ, Preqin, Burgiss and Mergermarket), World Bank development indicators, regional private equity and venture capital associations and country specific stock market websites. The Panel Two-Stage Least Squares Instrumental Variables (2SLS IV), Panel Corrected Standard Errors (PCSE) and Feasible Generalised Least Squares (FGLS) estimation techniques were used. This was due to potential problems of endogeneity and spherical errors of serial correlation, heteroskedasticity, cross sectional dependence and multicollinearity. The results using the 2SLS IV estimation technique show that stock market capitalisation, GDP per capita, banking credit to private sector, real exchange rate and private investments are key macroeconomic drivers of private equity penetration in the selected Sub-Saharan African countries. Inflation had negative and insignificant effect on private equity penetration in the selected countries. The results using the PCSE and FGLS estimation techniques show that the signs of all the variables remain the same as was the case in the 2SLS IV estimation technique though the magnitudes were different. However, the results of PCSE and FGLS estimation techniques show that banking credit to private sector is significant in the FGLS model while private investments is significant in the PCSE model. GDP per capita, real exchange rate, stock market capitalisation and inflation are significant in both the PCSE and FGLS estimation techniques.

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“…For instance, Teti and Casillo (2013) or Belussi and Sedita (2015) focus on Italian cases, while Yazdanfar and Turner (2012) discuss the Swedish perspective and Reddy andSubbaiah (2011) andMohanan (2006) discuss the Indian scenario. In addition to the regional settings, more cross-sectional contributions, such as that by Duxbury et al (1996) and international studies such as those conducted by Fischer (1993), Landström (1993), Koryak and Smolarski (2008) Groh et al (2010b), Groh and Liechtenstein (2011c) or Bernoth and Colavecchio (2014) should contribute to the advancement of the risk capital literature as well as to the dissemination of good practices in business with respect to exploitation issues. As recommended by several scholars (e.g.…”

Section: Prospective Avenues For Researchmentioning

confidence: 99%

Financing entrepreneurship by risk capital - evidence revisited

Fellnhofer

2017

JIBED

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This paper summarises the large body of literature dedicated to risk capital within entrepreneurship. This work attempts to advance this field of research and identifies crucial research prospects by examining and evaluating the current body of literature by means of a literature review using a qualitative and quantitative approach. Multi-level comparisons of previous discussions and studies on the perspectives of different market participants reveal gaps that warrant further critical debate. Having synthesised the existing body of literature, the paper concludes by proposing three essential directions for the future while calling for stronger (theoretical) ties between the finance and entrepreneurship literature.

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The macroeconomic determinants of private equity investment: a European comparison

Cited by 24 publications

References 24 publications

Challenges to Scaling Sustainable Private Equity Markets in Emerging Europe

Challenges to Scaling Sustainable Private Equity Markets in Emerging Europe

Macroeconomic Drivers of Private Equity Penetration in Sub-Saharan African Countries

Financing entrepreneurship by risk capital - evidence revisited

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