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The impact of private equity on firms? patenting activity

Amess, Kevin; Stiebale, Joel; Wright, Mike


Professor of Managerial Economics

Joel Stiebale

Mike Wright


The paper analyses the impact of private equity (PE) backed leveraged buyouts (LBOs) on innovative output (patenting). Using a sample of 407 UK deals we find that LBOs have a positive causal effect on patent stock and quality-adjusted patent stock. Our results imply a 6% increase in quality-adjusted patent stock three years after the deal. The increase in innovative activity is concentrated among private-to-private transactions with a 14% increase in the quality-adjusted patent stock. We also find evidence suggesting that PE firms facilitate the relaxation of financial constraints. In sum, our findings suggest that PE firms do not promote short-term cost-cutting at the expense of entrepreneurial investment opportunities with a long-term pay-off.


Amess, K., Stiebale, J., & Wright, M. The impact of private equity on firms? patenting activity. European Economic Review, 86,

Journal Article Type Article
Online Publication Date Sep 14, 2015
Deposit Date Mar 4, 2016
Publicly Available Date Mar 4, 2016
Journal European Economic Review
Print ISSN 0014-2921
Electronic ISSN 0014-2921
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 86
Keywords Private equity; Leveraged buyout; Entrepreneurial buyouts; Innovation
Public URL
Publisher URL


EER-D-15-00233R1_manuscript.pdf (305 Kb)

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