Private equity buyouts and firm exports: evidence from UK firms

BIS Working Papers  |  No 961  | 
17 August 2021



Private equity (PE) firms strongly affect the activities of companies which they acquire. After buyouts, target companies enjoy better access to finance and experience operational enhancements. Such improvements could help companies acquired by PE firms to increase their export activities. Ascertaining whether this is the case is important because reaching external markets brings many benefits both to corporates and to the economy as a whole.


We examine whether PE firms enhance targets' exports after acquisition by using a panel data set of UK companies for the period 2004–2017. To identify the impact, we use difference-in-differences estimations comparing target companies to similar companies which were not acquired by PE firms. In addition, we examine if the effect of PE firms on target exports is greater when target companies had previously had credit constraints. Further, we assess whether the impact of PE firms on target company exports relates to the easing of financial constraints and/or enhancements in productivity. 


Following PE buyouts, targets are likely to increase their exports relative to other, similar companies. Indeed, we find that non-exporting targets may start exporting. In addition, targets of PE buyouts exhibit higher export volumes and higher exporting intensity after being acquired relative to other, similar companies. These effects are stronger when the targets had been financially constrained or had exhibited lower productivity. These findings suggest that private equity investors boost target companies' exports by mitigating financing constraints and boosting productivity.


This paper examines the impact of private equity buyouts on the export activity of target firms. We exploit data on UK firms over the 2004-2017 period, and use difference-in-differences estimations on matched target versus non-target firms. Following private equity buyouts, non-exporting firms are more likely to begin exporting, and target firms are likewise more likely to increase their value of exports and their export intensity. Evidence from split-sample analysis further suggests that these patterns are consistent with private equity investors relaxing financial constraints and inducing productivity improvements.

JEL classification: G34, G32

Keywords: private equity buyouts, exporting, financial constraints, transactions