Driving change? A systematic exploration of private equity and innovation

PurposeThis paper aims to review, systematize and map the extant literature on private equity (PE) and study the underlying research agenda for investment selection and value creation in portfolio firms of PE investors. The PE investment process entails the preinvestment stage, where PE investors screen the target firms, and the postinvestment stage, where PE investors monitor the funded firms. With the motive to understand both stages, this review consolidates the findings of existing literature.Design/methodology/approachThis research adopts a systematic literature review approach to study the underlying themes in PE investment literature. To adequately profile the key research areas, the authors have adopted citation classics in addition to keyword search and drawn the most significant papers in this field of research based on citation metrics.FindingsThe review presents a heterogeneous set of themes by encapsulating the relevant PE literature and identifies significant and emergent themes within the broad research area of investment and performance. The foundational themes found are selection determinants for PE investments, value creation in PE investments and selection vs value-adding effect of PE investors. While the emergent themes are the relative performance of PE investments; sources of value creation; skill, luck and social capital in PE; and resource dependency vis-à-vis PE. Each theme or subtheme chalks out the underlying research agendas for future researchers.Originality/valueTo build an understanding of the selection determinants and value creation, this review addresses the need to synthesize and align the PE literature concerning pre and post investment stages. PE is a fertile research area that is systematically captured in this review by identifying themes, subthemes and avenues for future research.

Private equity (PE) investors enhance the governance of portfolio companies by installing high-powered boards, structuring the senior management team, installing reward and performance management systems, and advising the portfolio company. The aim is to reduce agency risks and to increase shareholder value. A growing body of literature investigates the real effects of PE buyouts on their portfolio companies. Empirical evidence suggest that PE buyouts do not consider efficiency improvements as their main value-creating strategy, but PE enhances growth rather than efficiency. Researchers’ understanding of PE’s entrepreneurial growth approach to increase shareholder value is limited to date, although it is known that PE portfolio companies are active innovators and that PE portfolio companies extensively engage in acquisitive growth. Financial performance of PE investors can also be driven by transferring value from other stakeholders to the portfolio company after buyout. Does PE buyout’s shareholder value creation come at the expense of other stakeholders, such as employees or customers, or do they also benefit? PE’s impact on employment and wages in portfolio companies has received considerable attention. The effect depends on the institutional setting and macroeconomic conditions and differs across PE groups and by type of buyout. PE buyouts do improve employees’ safety, well-being, and human capital. Research on the impact of PE on stakeholders other than employees is limited. Industry-specific studies uncovered fine-grained actions and mainly negative effects on various stakeholders beyond shareholders and employees. This highlights the tension between enhancing shareholder value at the expense of stakeholder value. Given the continuous development of practices in the PE industry, the governance roles of PE will remain a fertile ground for academic research.

Global private equity (PE) investments continue to increase at unprecedented levels over the last two decades, as investors are increasingly thriving over the potential of funded firms. The purpose of this study is to provide an understanding of determining factors that guide the flow of private equity investment in target firms. The existing academic research concerning selection determinants of private equity investment is restrictive and unstructured. These determinants are diverse and observe inconclusive results in extant literature. To identify the firm-level determinants of private equity investment, understand the current gaps in the literature and direct the future scope of work, the authors conduct a systematic literature review of empirical private equity investment studies. The results pointed out the open issues in private equity literature focusing on drivers of investment decisions and extracted the most frequently observed selection determinants of private equity investments along with their causal relationship. The review also acknowledges that there exists a coherence among private equity and M&A investment decisions and thus, expands the scope of research by including empirical studies on M&A determinants. The study creates a comprehensive database and identifies shortcomings in the relevant literature addressing private equity.

The analysis of the financialization of food and farming has tended to focus on issues such as the impact on the productive and input sectors of the food chain, including the role of asset management companies, private equity consortia and other financial institutions in acquiring and managing farmland. However, processes of financialization impact along the whole agri-food supply chain, including the retail and food service sectors. This paper analyses the take-over by a private equity company of Somerfield, one of the UK’s leading supermarket chains, and the impact the subsequent restructuring had on the management and organization of the retailer’s operations. In doing so, the paper not only extends the analysis of the effects of financialization on the food system, but also raises questions about the extent to which the supermarkets are the dominant actors in the establishment and management of agri-food supply chains.

ABSTRACTThe paper explores whether venture capital (VC) and private equity (PE) investments have complementary or substitute effects on innovation in high-tech entrepreneurial firms in different institutional settings, focusing on different levels of capital market development, entrepreneurial culture, and intellectual property rights protection. Using a panel sample of 326 firms from 12 EU countries observed from 2009–2013, the empirical results show that the VC/PE effect on high-tech entrepreneurial firms’ innovation is stronger in countries with a less-developed capital market. This suggests that VC/PE investments play a substitute role. A partial substitute role of VC/PE is also detected in firms located in countries with a low entrepreneurial culture. However, no significant evidence emerged regarding the level of protection of intellectual property rights. The results are generally robust to various econometric specifications. The implications of the resulting framework, the study’s limitations, and opportunities for further research are also discussed.

Currently and globally, the majority of ART treatments are performed either fully in the private medical sector or are partially subsidized in the public sector but with common treatments spill-over to the private sector; countries where there is sufficient public coverage of ART are in fact rare. While private clinics and hospital have been the norm in ART for decades, in recent years the field has undergone significant consolidation, and this has resulted in an influx of large financial players such as private equity (PE) firms. The results are a series of mergers and acquisitions that are shaping the geography of ART provision. In this debate, I will take on the “pro” side and I will highlight the scholarship around the changes in care brought about by PE ownership of medical practices, bringing examples from branches of medicine such as dermatology, dentistry, long term care or Ob&Gyn that have experienced market consolidation in the last decades. I will show that available evidence indicate that the change in ownership to PE of private medical practices is associated with an increase in the number of patients treated and a net increase in payments to clinicians. Moreover, PE ownership has been repeatedly associated with a perception of higher quality care by patients, while clinical KPIs have not gotten worse and, if anything, have improved. This is usually due to greater intentional focus on standardization and quality control, streamline and protocolization of treatments, and centralization of certain administrative areas. I will further argue that, in large PE owned networks, best practices tend to be enhanced by peer to peer sharing and central medical boards, while centralization and digitalization of patient data collection favors research and development in a field that sorely lacks public funding for reproductive research.

Currently and globally, the majority of ART treatments are performed either fully in the private medical sector or are partially subsidized in the public sector but with common treatments spill-over to the private sector; countries where there is sufficient public coverage of ART are in fact rare. While private clinics and hospital have been the norm in ART for decades, in recent years the field has undergone significant consolidation, and this has resulted in an influx of large financial players such as private equity (PE) firms. The results are a series of mergers and acquisitions that are shaping the geography of ART provision. In this debate, I will take on the “pro” side and I will highlight the scholarship around the changes in care brought about by PE ownership of medical practices, bringing examples from branches of medicine such as dermatology, dentistry, long term care or Ob&Gyn that have experienced market consolidation in the last decades. I will show that available evidence indicate that the change in ownership to PE of private medical practices is associated with an increase in the number of patients treated and a net increase in payments to clinicians. PE ownership has been repeatedly associated with a perception of higher quality care by patients, while clinical KPIs have not gotten worse. This is usually due to greater intentional focus on standardization and quality control, streamline and protocolization of treatments, and centralization of certain administrative areas. I will further argue that, in large PE owned networks, best practices tend to be enhanced by peer to peer sharing and central medical boards, while centralization and digitalization of patient data collection favors research and development in a field that sorely lacks public funding for reproductive research.

Motivated by the institutional setting and based on the extant literature, we raise the following two research questions: (I) how do various sources of external financing affect firms' investment efficiency and investment opportunities in a highly regulated financial market like China? And (ii) what is the effect of government subsidy on investment efficiency and investment opportunities in a government-dominated financial system? Empirical analysis by usingpooled ordinary least squares (OLS) and Fixed Effect (EF) regression model with robust standard error by using STATA software have been employed for this study to examined the effects of various external financing sources on firm investment efficiency and opportunities in China. Using the established measurements of investment efficiency and investment opportunities, we analysed 10,691 firm-year observations from 2002 to 2011, which obtained from Chinese listed firms.We found that, due to the tight control over the eligibility of public and private equity issues set by the China Securities Regulatory Commission (CSRC), Chinese listed firms are still heavily depend on the more expensive source of financing–bank loans. This finding supports the conclusion drawn in Forsake et al. (2012), and Zou and Xiao (2006) that only a small amount of firms which meet the eligibility tests. However, we found that bank loans have a positive effect on investment efficiency and investment opportunities. This finding supports Cull and Xu's (2005) finding on the relationship between bank loans and reinvestment, and extends existing literature to bank financing and investment efficiency literature. In addition, we found that public equity issues have little impact on firm investment efficiency. However, private equity placements and government subsidies have a positive effect on investment efficiency, while private equity financing is negatively associated with the investment opportunities and government subsidies also do not have a significant impact on investment opportunities. According results, this research provides crucial info to managers, market regulators and investors to be able to enrich effective external financial process along with better capital market in China. Our findings also have important insights for investors and firms, and policy implications for policy-makers and regulators.

Background: With global changes in markets and government regulations, most organizations, which previously opted for offshore production, began to return to their country of origin—a process called reshoring. The new strategies for locating units and business models, which involve decisions to outsource production and organizational capacity, now face a new context of Industry 4.0, a market for technologies with the potential to transform entire supply chains in addition to directly influencing organizational aspects with innovative solutions and resource efficiency. Methods: This systematic literature review (SLR) found 43 articles relating to reshoring and Industry 4.0; there was an increase in publications in the last few years. We divided the studies according to 9 aspects: market uncertainties and labor supply; support for managerial decision making; competitive priorities analysis (costs and efficiency); business strategies; information knowledge and collaboration management; political, social and economic changes; risk security and privacy management; supply chain management; and investment market and private equity funds. Results: This article presents a content analysis of articles in the field of administration, focusing on location strategies, technology adoption, and organizational changes. The study identifies key aspects such as research quality, publication trends, regional focus, and strategy topics. The findings emphasize the importance of research objectives and problem-solving for managerial decision-making and highlight the need for further exploration in the literature. Conclusions: Reshoring, Industry 4.0, and location strategies are relevant topics for global management. The supply chain plays a role in decision-making for location and technology adoption, suggesting the need for more research in supply chain management.

This paper investigates whether private equity (PE)‐backed acquirers have a “parenting advantage” in the mergers & acquisitions (M&A) market. We employ a sample of 788 PE‐backed firms and a carefully matched control group of 6,652 non‐PE‐backed peers, for which we observe the entire acquisition history over a 19‐year time span. Difference‐in‐differences estimates suggest that PE backing induces a sizeable but short‐lived boost to acquisition activity, while the type and complexity of acquisitions are similar to those of non‐PE‐backed peers. These results are consistent with the idea that PE backing enhances execution and speed in the M&A market. We find that portfolio firms benefit from this boost through improved valuations and margins. The extent to which this is true, however, depends on the institutional setting of the PE owner. Our results indicate that add‐on acquisitions are detrimental if PE owners are late buyers or suffer from limited attention problems.

The private capital asset class has grown to over $10 trillion in assets under management and has significant potential to contribute to environmental, social, and governance (ESG) goals. However, there is a dearth of academic research about ESG with regards to private capital investing. This literature review adopted a mixed-methods approach, combining a quantitative (bibliometric) analysis with a qualitative review of the articles. It was found that less than 1% of the literature, written in English, between 1960-2020 on private equity and venture capital addresses topics related to sustainability. It was also observed that the 46 papers which address sustainability topics can be categorized into 13 themes, including certifications and standards, impact investing, and corporate social responsibility. Investment in private securities grew at twice the rate as public securities during the end of this time-period and interest in sustainability integration in private capital investing is growing. Incentives for private equity and venture firms to engage with sustainable investments are being driven by institutional investors, such as pension funds and insurance companies. The focus of sustainability research has typically been on public markets, hindering the potential of private capital investment to influence sustainable policy and practices. The objective of this paper is to provide evidence of the dearth of academic literature on the topic of private capital markets and sustainable investment, while identifying current themes in the existing literature so that future work may address gaps in research.

Growth expectations and institutional settings in Central Eastern Europe (CEE) seem favorable for establishing a vibrant venture capital and private equity (VC/PE) market. However, the risk capital supply there is rather small in relation to the growth prospects. We examine the determinants of institutional investors' CEE allocation decisions through a questionnaire addressed to limited partners worldwide. Investors in CEE VC/PE limited partnerships are very knowledgeable about the region, they also appreciate other emerging regions, they regard entrepreneurial opportunities in CEE as very favorable, and they attribute local general partners in CEE with a high level of professional quality. In more detail, they appreciate team independence and the match of fund strategies with the teams' backgrounds. As economic growth expectations are fairly high in all emerging regions, investors focus on other allocation determinants, notably on the potential of institutional and cultural characteristics to turn the economic growth into entrepreneurial activism.

The objectives of this paper are to reflect and assess infrastructure as an asset class and to analyse the regulatory changes that are underway to allow institutional investors to play a larger role in infrastructure investment. The methodology to address the objectives was a systematic review of infrastructure-related literature and case study analysis of institutional investment in infrastructure from selected African countries. The findings from the study showed that investment features of infrastructure contribute to making infrastructure a unique investment prospect for public and private investors. The research has also analysed regulatory changes to Regulation 28 under the South African Pension Funds Act 24 of 1956 that are intended to foster more investment into infrastructure through private equity. The research presents practical implications for institutional investors, with regard to the different infrastructure related financial products and investment channels which they can pursue in infrastructure investing on the African continent.

Client onboarding is a critical process in financial services, investment management, and regulatory compliance, where speed, accuracy, and risk mitigation determine client experience and institutional integrity. This study explores the optimization of client onboarding efficiency through the integration of document automation and data-driven risk profiling models. Drawing from my direct contributions in onboarding operations, the research focuses on workflow innovations and automated documentation systems that streamline identity verification, compliance checks, and KYC procedures. Traditional onboarding processes are often fragmented, manual, and susceptible to errors, leading to increased turnaround time, operational bottlenecks, and compliance risks. In response, I designed and implemented a documentation workflow that harnesses intelligent form recognition, digital signatures, and auto-populated client templates, significantly reducing time spent on manual data entry. Coupled with risk-based algorithms, this approach categorizes clients based on predictive analytics using behavioral, transactional, and jurisdictional data to determine onboarding paths ranging from simplified onboarding for low-risk clients to enhanced due diligence for high-risk profiles. The paper demonstrates that combining document automation tools with machine learning-powered risk profiling ensures faster decision-making, improved regulatory alignment, and reduced client abandonment rates. Notably, these systems facilitate real-time data extraction from structured and unstructured documents, flag inconsistencies, and allow seamless integration with CRM and AML systems. Quantitative metrics from deployment in real-world scenarios show a 40% reduction in onboarding time, a 25% improvement in error detection, and a measurable uplift in client satisfaction. Furthermore, the adaptive risk scoring models enhance fraud detection and provide a scalable foundation for cross-border onboarding, especially in private equity and institutional investment settings. Key insights highlight the importance of user-centric workflow design, dynamic form generation, and continuous model training to adapt to evolving regulatory landscapes. This work contributes to the growing field of digital onboarding by offering a replicable model for financial institutions seeking to modernize client acquisition.

Purpose – This study maps current evidence on religious moderation in Islamic Education in Indonesia to assess the effectiveness of policy, curriculum, pedagogy, and the institutional ecosystem—framed by Pancasila—as a counter-radicalization strategy and a shaper of inclusive character. Design/methods/approach – Systematic Literature Review (SLR) grounded in Kitchenham & Charters. Scopus search (February 12, 2025) using TITLE-ABS-KEY("religious" AND "moderation"), period 2018–2025, document type article. 754 articles found; 127 filtered as relevant; 72 fully reviewed; 2 excluded (review-based); 70 analyzed through qualitative content analysis (mechanical and interpretive stages) following the PRISMA scheme. Findings – Implementation of moderation is effective when wasathiyah values are integrated across subjects and practiced through dialogic methods (problem solving, inquiry, discussion), an integrative curriculum, and educator involvement. As a counter-radicalization strategy, effectiveness is supported by firm campus policies framed by Pancasila, the strengthening of national values (tawassuth, tawazun, i‘tidal, al-wathaniyah), and the role of madrasahs and universities as agents of social change. Key factors include school leadership, an inclusive curriculum, interfaith dialogue, and directed use of technology (Technological Pedagogical Content Knowledge [TPACK]). These findings sequentially answer RQ1–RQ4 (curriculum implementation; counter-radicalization strategies; contributions of empirical approaches; the role of higher education). Research implications – Recommendations include the standardization of moderation competencies in the Islamic Religious Education (PAI)/higher-education curriculum; the design of dialogic pedagogy grounded in experiential learning and inclusive social projects; capacity building for educators and digital literacy (TPACK); and institutional policies that synergize mentoring, intra/extracurricular activities, anti-radicalization governance, and curation of the educational digital ecosystem.