Working Paper No. 1115

Private Equity’s Unintended Dark Side: On the Economic Consequences of Excessive Delistings

Published: March 4, 2016, revised November, 2016Pages: 39Keywords: Private equity; Political economy; Stock market; Delistings; Investment; ProductivityJEL-codes: G34; G24; P16

Private Equity’s Unintended Dark Side: On the Economic Consequences of Excessive Delistings Alexander Ljungqvist, Lars Persson and Joacim Tåg


Over the past two decades, the U.S. stock market has been shrinking as the public firm model has begun to fall out of favor. We develop a political economy model of delistings to study the wider economic consequences of this trend. We show that the private and social incentives to delist firms from the stock market need not be aligned. Delistings can inadvertently impose an externality on the economy by reducing citizen-investors' exposure to corporate profits and thereby undermining popular support for business-friendly policies. By facilitating companies' departures from the stock market, private equity firms can trigger a chain of events that may lead to long-term reductions in aggregate investment, productivity, and employment.

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?

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