Journal of Business Economics

, Volume 88, Issue 3–4, pp 393–469 | Cite as

Does culture affect the performance of private equity buyouts?

  • Benjamin Hammer
  • Heiko Hinrichs
  • Bernhard Schwetzler
Original Paper


This paper uses GLOBE’s performance orientation (PO) dimension to investigate the relationship between national culture and private equity (PE) performance. We argue that high PO has negative performance implications as it provides the lowest potential for portfolio firms to benefit from a spillover of the distinct PE performance focus, and vice versa. To test this hypothesis, we analyze operating performance metrics of 946 deals from 26 European countries and exit channels of 5093 global deals from 67 countries. Consistent with the “spillover hypothesis”, we find that higher levels of PO are detrimental to efficiency improvements and increase the probability for unsuccessful exits. These findings hold after addressing endogeneity concerns, confounding and measurement error.


Private equity Leveraged buyouts Exit channel Operating performance Culture 

JEL Classification

G24 G34 


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2017

Authors and Affiliations

  1. 1.HHL Leipzig Graduate School of ManagementLeipzigGermany

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