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Skill, syndication, and performance: Evidence from leveraged buyouts

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  • Stanfield, Jared

Abstract

This paper studies why buyout firms syndicate and how this influences buyout performance. I find evidence that skill plays an important role in syndication and its effect on performance. The results suggest low-skill firms utilize syndication to pool skill, resources, and information to overcome firm-specific deficiencies and improve performance, but no such effect exists for high-skill firms. This evidence is robust to potential endogeneity concerns and other alternative explanations. Additionally, this paper is the first to use a robust statistical network methodology studying the formation of syndication networks that allows for a consistent estimation of effects within the network despite the lack of independence among observations.

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  • Stanfield, Jared, 2020. "Skill, syndication, and performance: Evidence from leveraged buyouts," Journal of Corporate Finance, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:corfin:v:65:y:2020:i:c:s0929119917305916
    DOI: 10.1016/j.jcorpfin.2019.101496
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    More about this item

    Keywords

    Syndication; Leveraged buyout; Private equity; Boundaries of the firm; Social networks;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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