On the real effects of private equity investment: evidence from new ...

Table 5Private equity and firm entry: measuring PE investment at the country levelIndustry shareEntry US * Private equity(i)OLS(ii)Tobit(iii)TobitFraction of new firms Fraction of exited firmsPE investment PE investment Excluding trans. economies Small firms only PE investment-0.005 -0.005 0.156 -0.026 -0.012(0.09) (0.109) (0.116) (0.055) (0.101)0.300 0.300 0.189 0.263 0.239(0.112)** (0.078)*** (0.079)** (0.117)** (0.059)***Observations 571 571 471 571 571R 2 0.60 0.56 0.63(iv)OLS(v)OLSThe reported estimates are from OLS regressions (columns (i) and (iv)-(v)) and from a Tobit regression (columns (ii) and (iii)). The dependent variable is theratio of all new firms to total firms (in columns (i)-(iii)), the ratio of all new firms with less than 10 employees to total firms (column (iv)), and the ratio ofall exited firms to total firms by 2-digit NACE rev. 1.1, averaged for 1998-1999 (column (v)). Industry share is the ratio of industry sales to total sales by allindustries in each country. Entry US is the ratio of new firms to total firms in the US, by 2-digit NACE rev. 1.1. Private equity measures actual private equityinvestment at the country level, normalized by GDP, averaged for 1998-1999. All regressions include a constant, 2-digit industry dummies and countrydummies, not reported. White’s heteroskedasticity corrected standard errors standard errors are reported in parentheses. ***, **, and * report significance atthe 1%, 5% and 10% level, respectively. See Appendix 1 for detailed variable definitions and sources.ECBWorking Paper Series No 1078August 200941