DIFFERENCES OF PRIVATE EQUITY DETERMINANTS: COUNTRY-LEVEL EVIDENCE FROM EUROPE

• Authors: Štofa Tomáš , Šoltés Michal
• Languages of publication: EN

Abstracts

EN

This paper deals with private equity determinants within the European Union, based on data covering 11 years and 20 countries. We investigate driving forces of private equity activity in terms of the level of country maturity. The cluster analysis using Ward’s method is performed suggesting three different clusters of countries with similar properties, to provide better country assessment than geographical distribution. We use panel data techniques to study 26 possible determinants of private equity activity. The study reveals the macroeconomic factors, labour market, and business environment have a significant impact on investment activity in countries, but the expected positive effect of the stock market was not confirmed. Furthermore, the differences between private equity determinants in individual clusters have been observed. While the positive impact of innovation prevails in the more developed countries, there is also a negative effect of the interest rate. The less developed countries tend to be more endangered by the crowding-out effect of government expenditures and strong property rights protection rather than socio-political stability and tax burden.

Keywords

EN

PRIVATE EQUITY; PANEL DATA ANALYSIS; EUROPEAN UNION; WARD’S METHOD

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2020
• Volume: 68
• Issue: 8
• Pages: 827 – 845

Contributors

author

Štofa Tomáš

• Technical University of Košice, Faculty of Economics, Nemcovej 32, 040 01 Košice, Slovak Republic

author

Šoltés Michal

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2020.08.04