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

Frank R. Lichtenberg, Donald Siegel

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252 Scopus citations

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 - Sep 1990

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ASJC Scopus subject areas

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

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