The effects of "going private" using private equity: The newly private corporation and the dimensions of corporate performance

Document Type

Article

Publication Date

3-1-2010

Abstract

The trend toward private ownership of corporations prompts a reexamination of the dimensions of corporate performance under a governance system that includes powerful owners and a reduced public presence. Using insights from corporate social responsibility and stakeholder theories and informed by agency theory, we develop a model regarding the performance implications of public corporations going private through the use of private equity. We put forth that in general going private tends to result in greater emphasis on corporate financial performance and in lesser emphasis on corporate social performance (CSP). Yet several variables, including the firm's capitalization, its post-going-private exit strategy, and its managerial discretion, are proposed to moderate the negative relationship between going private and CSP. © 2010 Center for Business Ethics at Bentley University.

Identifier

77951172340 (Scopus)

Publication Title

Business and Society Review

External Full Text Location

https://doi.org/10.1111/j.1467-8594.2009.00358.x

e-ISSN

14678594

ISSN

00453609

First Page

75

Last Page

106

Issue

1

Volume

115

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