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Private equity and financial distress: A bibliometric literature review

Author

Listed:
  • De Silva, Cristina
  • Del Gaudio, Belinda Laura
  • Gervasoni, Anna
  • Lertora, Michele

Abstract

This paper presents a bibliometric literature review to examine the impact of private equity (PE) on portfolio companies' financial distress. Due to PE's increasing role in the economy, this topic is of growing interest. Our analysis encompasses 151 publications, exploring co-occurrence networks, co-citation patterns, publication patterns and key research streams. The existing literature shows that PE-backed companies' risk of distress increases following a buyout. However, when controlling for leverage, this does not result in higher bankruptcy rates compared to non-PE-backed companies. Furthermore, PE-backed companies are more likely than non-PE-backed peers to avoid insolvency in the event of financial distress. This ability to manage financial distress effectively is attributed to corporate governance mechanisms based on active and concentrated ownership, availability of financial resources, and reputational concerns. In addition, the study identifies future research avenues and provides valuable insights for academic scholars, industry practitioners, and policymakers alike.

Suggested Citation

  • De Silva, Cristina & Del Gaudio, Belinda Laura & Gervasoni, Anna & Lertora, Michele, 2025. "Private equity and financial distress: A bibliometric literature review," Research in International Business and Finance, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:riibaf:v:74:y:2025:i:c:s0275531924004677
    DOI: 10.1016/j.ribaf.2024.102674
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    More about this item

    Keywords

    Financial distress; Private equity; Corporate crises; Restructuring; Turnaround;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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