Found 22 article(s) for author 'Josh Lerner'

Private Equity and Financial Fragility during the Crisis

Private Equity and Financial Fragility during the Crisis. Josh Lerner, 2017, Paper, “Does private equity increase financial fragility during economic crises? To investigate this issue, we examine the financial decisions and performance of private equity-backed companies in the United Kingdom during the 2008 financial crisis. We find that PE-backed companies experienced a smaller decline in investment, relative to a carefully selected control group. PE-backed companies also experienced a larger increase in debt and equity issuances, while overall leverage remained unchanged. The effects are particularly strong for companies that were more likely to be financially constrained and those where private equity sponsors were more likely to have resources to help the portfolio company. The results are consistent with the hypothesis that PE sponsors relax financing constraints during a sudden tightening of credit markets and inconsistent with the hypothesis that private equity increase financial fragility during periods of financial turmoil.Link

Tags: , , ,

Private Equity and Industry Performance

Private Equity and Industry Performance. Josh Lerner, March 2017, Paper, “The growth of the private equity industry has spurred concerns about its potential impact on the economy more generally. This analysis looks across nations and industries to assess the impact of private equity on industry performance. Industries where PE funds have invested in the past five years have grown more quickly in terms of productivity and employment. There are few significant differences between industries with limited and high private equity activity. It is hard to find support for claims that economic activity in industries with private equity backing is more exposed to aggregate shocks. The results using lagged private equity investments suggest that the results are not driven by reverse causality. These patterns are not driven solely by common law nations such as the United Kingdom and United States, but also hold in Continental Europe.Link

Tags: , , ,

Conclusion: Time for Participatory Budgeting to Grow Up

Conclusion: Time for Participatory Budgeting to Grow Up. Josh Lerner, February 13, 2017, Paper, “Only a few years ago, participatory budgeting (PB) in the US was in its infancy, a tiny experiment in democracy. After a five-year growth spurt, PB has entered its awkward adolescence, full of bold achievements, flashes of potential, and some stumbles. PBNYC’s innovation has raised new questions for participatory democracy, as the contributors to this special issue highlight. In this article, I lift up the key impacts and challenges that they discuss, and their practical implications. I argue that for PBNYC and other PB processes to grow up, city leaders need to invest in equity, expand project eligibility and funding, and scale PB up to the city level.” Link

Tags: , , ,

Innovation Policy and the Economy: Introduction to Volume 17

Innovation Policy and the Economy: Introduction to Volume 17. Josh Lerner, 2017, Paper, “This volume is the Seventeenth annual volume of the National Bureau of Economic
Research (NBER) Innovation Policy (IPE) group. The IPE group seeks to provide an accessible
forum to bring the work of leading academic researchers to an audience of policymakers and
those interested in the interaction between public policy and innovation.Link

Tags: , ,

Budgeting for Equity: How Can Participatory Budgeting Advance Equity in the United States?

Budgeting for Equity: How Can Participatory Budgeting Advance Equity in the United States? Josh Lerner, 2016, Paper, “Participatory budgeting (PB) has expanded dramatically in the United States (US) from a pilot process in Chicago’s 49th ward in 2009 to over 50 processes in a dozen cities in 2015. Over this period, scholars, practitioners, and advocates have made two distinct but related claims about its impacts: that it can revitalize democracy and advance equity. In practice, however, achieving the latter has often proven challenging. Based on interviews with PB practitioners from across the US, we argue that an equity-driven model of PB is not simply about improving the quality of deliberation or reducing barriers to participation. While both of these factors are critically important, we identify three additional challenges…Link

Tags: , ,

Private Equity in Emerging Markets: Yesterday, Today, and Tomorrow

Private Equity in Emerging Markets: Yesterday, Today, and Tomorrow. Josh Lerner, May 2016, Paper, “General partners of private equity entered emerging markets in the 1990s seeking diversification and returns, and their investment has increased substantially since then. Manager selection remains important because there is a wide range of returns across funds of the same vintage, and minority LP (limited partner) investments are found to perform the same as or better than majority investments.Link

Tags: , , ,

Pay Now or Pay Later? The Economics within the Private Equity Partnership

Pay Now or Pay Later? The Economics within the Private Equity Partnership. Victoria Ivashina, Josh Lerner, March 26, 2016, Paper. “The article focuses on the importance of equity partnerships that are essential to the professional service and investment sectors. It examines private equity partnerships and shows that the allocation of fund economics to individual partners is divorced. It mentions that departures of senior partners have negative effects on the ability of funds to raise additional capital.Link

Tags: , , , , , , ,

Pay Now or Pay Later?: The Economics within the Private Equity Partnership

Pay Now or Pay Later?: The Economics within the Private Equity Partnership. Victoria Ivashina, Josh Lerner, March 2016, Paper, “The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships, and show that (a) the allocation of fund economics to individual partners is divorced from past success as an investor, being instead critically driven by status as a founder, (b) the underprovision of carried interest and ownership–and inequality in fund economics more generally–leads to the departures of senior partners, and (c) the departures of senior partners have negative effects on the ability of funds to raise additional capital.Link

Tags: , , , , ,

Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from China.

Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from China. Josh Lerner, March 1, 2015, Paper, “Using a difference-in-difference approach, we study how intellectual property right (IPR) protection affects innovation in China in the years around the privatizations of state-owned enterprises (SOEs). Innovation increases after SOE privatizations, and this increase is larger in cities with strong IPR protection. Our results support theoretical arguments that IPR protection strengthens firms’ incentives to innovate and that private sector firms are more sensitive to IPR protection than SOEs.Link

Tags: , , , , , ,

The Globalization of Angel Investments: Evidence across Countries

The Globalization of Angel Investments: Evidence across Countries. Josh Lerner, December 2015, Paper. “This paper examines investments made by 13 angel groups across 21 countries. We compare applicants just above and below the funding cut-off and find that these angel investors have a positive impact on the growth, performance, and survival of firms as well as their follow-on fundraising. The positive impact of angel financing is independent of the level of venture activity and entrepreneur friendliness in the country. But we find that the development stage and maturity of start ups that apply for angel funding…Link

Tags: , ,