The Real Effects of Private Equity Buyouts

Private equity buyouts have become a common element in the industrial development process. I survey the literature on the real economic effect of buyouts: employment, wages, productivity, and long-run investments. Employment tends to marginally fall after a buyout in most countries studied, with France being the exception. There are clear evidence of productivity gains following a buyout, with part of these being shared with workers through higher wages. The evidence is mixed regarding the effects on long-run investments.