The effects of leveraged buyouts on productivity and related aspects of firm behavior

Frank R. Lichtenberg, Donald Siegel

Research output: Contribution to journalArticle

247 Citations (Scopus)

Abstract

We investigate the effects of leveraged buyouts on total factor productivity (TFP) and related variables using a longitudinal database including over 12,000 manufacturing plants. LBOs (particularly MBOs) that occured during 1983-1986 had a strong positive effect on TFP in the first three post-buyout years: plant productivity increased from 2.0% above industry mean in the three pre-buyout years to 8.3% above industry mean in the three post-buyout years. However, 1981 and 1982 buyouts had no significant productivity effect. The employment and compensation of white-collar workers decline following buyouts, but those of blue-collar workers are unchanged.

Original languageEnglish (US)
Pages (from-to)165-194
Number of pages30
JournalJournal of Financial Economics
Volume27
Issue number1
DOIs
StatePublished - Jan 1 1990
Externally publishedYes

Fingerprint

Productivity
Buy-out
Leveraged buyouts
Firm behavior
Industry
Buy-outs
Total factor productivity
Data base
Blue-collar workers
Manufacturing
White-collar workers

ASJC Scopus subject areas

  • Accounting
  • Strategy and Management
  • Economics and Econometrics
  • Finance

Cite this

The effects of leveraged buyouts on productivity and related aspects of firm behavior. / Lichtenberg, Frank R.; Siegel, Donald.

In: Journal of Financial Economics, Vol. 27, No. 1, 01.01.1990, p. 165-194.

Research output: Contribution to journalArticle

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