The buyout-outcome evidence covers approximately 6,000 matched U.S. target firms acquired between 1980 and 2011. The study measures changes from the buyout year through the second post-buyout year relative to comparable control firms. Exact estimates were −1.4 percentage points for total employment, −4.4 points for organic employment, and +7.5 points for labor productivity across all buyouts. More than 80% of the estimated productivity gain reflected greater revenue growth at target firms.
Private-to-private buyouts recorded +12.8 percentage points in total employment, +3.1 points organically, and +14.7 points in labor productivity. Public-to-private transactions recorded −12.6 points in total employment, −10.0 points organically, and an imprecisely estimated +14.3-point productivity effect. Divisional transactions recorded −11.5, −16.0, and −5.0 points. Secondary transactions recorded +9.9, +6.1, and +0.7 points. The divisional and secondary productivity estimates were statistically imprecise.
The operating-execution evidence comes from restaurant-chain buyouts examined through surprise health inspections. The study-wide mean was 4.1 critical violations per inspection. Relative to the buyout-year baseline, estimated changes were −0.249 in year one, −0.530 in year two, −0.780 in year three, and −1.104 in year four. The visible percentages are City Shift Finance calculations that divide those estimates by the 4.1 study mean and round to whole numbers.
Critical violations remained flat before acquisition and declined steadily afterward, with statistical significance beginning in the second post-buyout year. Improvements were concentrated in food handling, kitchen maintenance, and customer-safety practices. Non-critical violations showed no corresponding decline. The study covered more than 50,000 Florida restaurants and more than 100 restaurant-chain buyouts.
The management-quality evidence comes from a study of 4,221 medium-sized manufacturing firms across Asia, Europe, and the United States. Among 137 private equity-owned firms, one received an average management-practice score below 2, equal to approximately 0.7%. Government-owned, founder-owned, family-owned, and family-CEO firms each had more than 15% of their scores below 2. Dispersed-shareholder firms had a distribution similar to private equity-owned firms.
The management-practice study found private equity-owned firms particularly strong in operations and monitoring, including continuous improvement, process documentation, review, and performance tracking. The research was primarily cross-sectional, and the authors cautioned that it could not establish a complete causal effect from ownership alone.
Labor productivity in the buyout study is measured as revenue per worker. The researchers could not separate physical productivity improvement from changes in markups. The restaurant evidence applies to one operating sector, and the management-practice comparison contains a relatively small private equity-owned sample. These limitations must remain in Notes.
