Private equity beyond the target: how buyouts reshape supply chains
The impact of private equity buyouts on target firms is well documented, yet empirical evidence on the impact of buyouts across the supply chain remains scarce. We address this gap by using unique production network data to examine how supply chains contribute to the ability of private equity investors to create and extract value. We show that, on average, suppliers of firms backed by private equity outperform their peers because of increased demand for inputs from customers backed by private equity – rather than alternative mechanisms such as knowledge spillovers.
