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The Economic Growth and the Opportunity for the Private Equity Funds to Divest: An Empirical Analysis for Eastern Europe

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  • Precup Mihai

    (Department of Economics, University of Paris 1 Panthéon-Sorbonne, 75231Paris, France)

Abstract

The author studies the private equity divestments in Eastern Europe and tests a long-term relation between these divestments and the real GDP variation. This research paper focuses on a sample covering the period 2000-2013 which considers the dynamics of the private equity divestments during the last financial crisis. The empirical analysis follows the methodology developed by Granger (1969), Toda and Yamamoto (1995), Dufour and Renault (1998), Konya (2004), Foresti (2006) and Onuoha, Okonkwo, Okoro, Kingsley (2018). The analysis shows that Eastern European private equity divestment market is still emerging characterized by high volatilities. The results prove that GDP recession explains in at certain degree the evolution of private equity divestments during the crisis. However, the Granger causality test shows that the information provided by the past variation of the real GDP cannot allow us to predict the short-term movements of private equity divestments in Eastern Europe.

Suggested Citation

  • Precup Mihai, 2019. "The Economic Growth and the Opportunity for the Private Equity Funds to Divest: An Empirical Analysis for Eastern Europe," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 29(3), pages 1-19, September.
    • Handle: RePEc:vrs:suvges:v:29:y:2019:i:3:p:1-19:n:1
    DOI: 10.2478/sues-2019-0009
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    References listed on IDEAS

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    More about this item

    Keywords

    private equity; divestments; Granger causality test; Eastern Europe;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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