Abstract

Private Equity investors provide lot of funding, are actively involved in the company and help earn high returns by taking large amount of risk. India has been open to Private Equity investment since 1998. During the financial crisis era, lots of companies had shifted their focus towards Private Equity Financing and lots of investments where done in India during 2007-2008. The paper studies about the Earnings quality of PE backed firms and non PE backed firms. The measures of earnings have been taken as persistence effect of accruals and cash flows. The dataset has been arranged in a Panel data form for a time period of 10 years and Heckman(1979) correction procedure has been used to control endogenity and sample selection bias. Keywords: Private Equity, Earnings, Endogenity, Heckman

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