Factor effects on Private Equity Activity: Investigating the Explanatory Power of Country-Specific Structural Factor Effects on Private Equity Activity

Matthew P. Clark & Kamilla H. Risanger

Student thesis: Master thesis

Abstract

This thesis investigates the explanatory power of country-specific structural factor effects on private equity activity using a sample of 108 countries for a 5-year period from 2014- 2018, with data sourced from Preqin and The Venture Capital and Private Equity Country Attractiveness Index. By use of both descriptive and econometric analysis, this thesis analyses the effects of 6 structural economic factors on private equity activity, represented by deal count and deal volume. We formulate an hypothesis for each of the 6 factors, and test these by running an OLS regression with both normal and logarithmic data, and extend the analysis through a POLS. The discussion looks at the economic interpretation of the results, and features a small case study of one country in the sample that has improved significantly, with accompanying policy proposals. We conclude that government policy should focus on Investor protection along with Entrepreneurial opportunities in order to encourage growth within the private equity industries.

EducationsMSc in Advanced Economics and Finance, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages107
SupervisorsKasper Meisner Nielsen