Research On The Impact Of Private Equity On Business Performance

The private equity market in China began to receive the attention of the government in 2005 and developed rapidly thereafter.The average management scale of private equity institutions in 2016 was approximately 3.4 billion yuan according to the report of Zero2IPO Research Center.Private equity has become one of the important means for enterprise financing,and it is also a hot spot of research.Private equity not only solves financing problems for enterprises,but also brings professional management to enterprises and provides a lot of value-added services to help enterprises develop better and faster.This paper aims to study the impact of private equity on business performance.First of all,it theoretically analyzes how private equity affects the operating performance of the invested enterprise.It reviews the relevant domestic and foreign literature and analyzes the mechanism of private equity affect business performance on the basis of existing theories.Then on the basis of theoretical analysis,this paper discusses the impact of private equity on business performance based on the two perspectives of private equity intervention and private equity characteristics under IPO and M&A samples,and combining with the life cycle stage of private equity intervention.In the empirical part,the enterprises have private equity investment in the IPO companies and M&A pools from 2013 to 2017 were selected as the research objects.First,the Wind M&A library was used to match to the M&A sample with industry and registration time first,then this paper compares the performance of enterprises with or without private equity and discusses the impact of private equity intervention on the business performance for the enterprises with private equity.Next this paper statistically examines the life cycle stage of private equity intervention and private equity characteristics,and empirically tests whether the life cycle stage of private equity intervention has an impact on business performance,and explores the influence of the private equity characteristics on the business performance under different life cycle stages.The study found that private equity intervention will have a positive impact on the business performance.For the samples under different exit modes,the effect of private equity intervention in improving the business performance of the company is greater under the M&A sample.The impact of private equity on business performance is lagging behind,but its impact is fully realized in the second years after intervention.The life cycle stage of private equity intervention will have a significant impact on the business performance.Shareholdings of private equity will have a positive impact on the business performance,the longer the private equity's shareholdings,the higher the company's operating performance.The proportion of shares held by private equity will have a positive impact on the business performance,the higher ratio of private equity,the higher the company's operating performance.