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Private Equity and Devaluation in Emerging Countries

Author

Listed:
  • Hernán Herrera-Echeverri

    (Economics and Finance School, EAFIT University, Carrera 49 N° 7 Sur – 50, Medellin Colombia)

  • Jerry Haar

    (Management & International Business, College of Business, Florida International University, 11200 SW 8th Street, MANGO 436, Miami, Florida 33199)

  • Juan Guillermo Salazar-Duque

    (Economics and Finance School, EAFIT University, Carrera 49 N° 7 Sur – 50, Medellin Colombia)

Abstract

Using a comprehensive database with 51 emerging countries studied over a 13 year period, we find that devaluation increases the PE investment. More years of annual devaluation have a higher impact in promoting PE investment. Conclusions are confirmed for total and high technology PE investments, but not for early stage PE investments. Devaluation does not benefit PE investment in firms in the early stages of development. Devaluation itself is not sufficient to encourage the appetite of investors; however, some country-level competitiveness variables are indispensable for making a country more fertile for PE investment when a devaluation occurs – the high relevance of competiveness increasing in the long term.

Suggested Citation

  • Hernán Herrera-Echeverri & Jerry Haar & Juan Guillermo Salazar-Duque, 2017. "Private Equity and Devaluation in Emerging Countries," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 17(1), pages 1-26, March.
    • Handle: RePEc:wsi:gejxxx:v:17:y:2017:i:01:n:gej-2016-0048
    DOI: 10.1515/GEJ-2016-0048
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    Cited by:

    1. Herrera-Echeverri, Hernan & Nandy, Debarshi K. & Fragua, Daniel, 2022. "The role of private equity investments on exports: Evidence from OECD countries," Journal of Multinational Financial Management, Elsevier, vol. 65(C).

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