The Agency Theory, Parenting Advantage, and Information Asymmetries: A Review from the Lens of Leveraged Buyouts

Abstract

The principal management theoretical lenses for examining leveraged buyouts have been the agency theory and information asymmetries. Occasionally a wider number of theories and concepts have been invoked, such as the parenting advantage, the resource-based view, and the market for corporate control. This paper reviews the fundamental literature connected with the theories and examines the applicability to the leveraged buyouts carried out by private equity firms.