Do Politics Shape Buyout Performance? - Archive ouverte HAL Access content directly
Journal Articles Harvard business review Year : 2008

Do Politics Shape Buyout Performance?

(1) ,
1
Aviad Pe'Er
  • Function : Author

Abstract

Before your next U.S. acquisition, check how the company's home state votes. Our research shows that the performance of buyouts in "red" Republican states is likely to be above average, while buyout performance in "blue" Democratic states is likely to fall below the mean. (See map.) This finding held even after controlling for a dozen other factors that could explain performance differences, including the target firm's size, the historical performance of buyouts in its sector, and the performance of the acquiring firm. We argue that Republican views are better aligned with buyout value-creation strategies (such as outsourcing labor, shutting down less efficient units, lower commitment to social responsibility, and deunionization) than Democratic views are.
Not file

Dates and versions

hal-00758553 , version 1 (28-11-2012)

Identifiers

Cite

Oliver Gottschalg, Aviad Pe'Er. Do Politics Shape Buyout Performance?. Harvard business review, 2008, vol. 86, n° 11, pp. 26-27. ⟨10.1225/F0811A⟩. ⟨hal-00758553⟩

Collections

HEC CNRS
54 View
0 Download

Altmetric

Share

Gmail Facebook Twitter LinkedIn More