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A few years ago I was reading The Economist and I remember it stated a particular academic paper that underpinned the rationale for the existence of private equity firms. I have tried to find this article but have had no success. I believe this paper justified why companies are run better privately. Does anyone know what this paper is/might of been?

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  • $\begingroup$ I am sure there are dozens of such papers. Perhaps you could narrow it down by specifying what kind of paper it was or what tools it used. Was it a political economy/economic philosophy paper, an applied econometrics paper, was it a theoretical description using perhaps a principal-agent model? Was it an examination of a hypothesis or was it rationalization? $\endgroup$ – Giskard Jan 10 '16 at 13:07
  • $\begingroup$ From memory it was some seminal paper supporting the industry. Failing that any references of prominent papers suggesting why private companies are run better than public companies would be fine. $\endgroup$ – Permian Jan 10 '16 at 13:24
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    $\begingroup$ I am not quite sure what you are asking: all private firms (that is, whose stock is not publicly traded) are not run by private equity firms. As for the benefits of private firms, I could find this article : economist.com/node/1649714 . Let us know if it's the one you are refering to. It asserts that going private allows the firm to save money (no listing fees), and it also decrease the disclosure requirements, which can provide a competitive advantage. $\endgroup$ – Hector Jan 10 '16 at 23:22
  • $\begingroup$ @Hector Not all private firms are run by private equity firms I know, but all the firms private equity firms run are private, therefore suggesting an operational benefit to going private. $\endgroup$ – Permian Jan 11 '16 at 10:45
  • $\begingroup$ Please put long comments as answers if they answer the question $\endgroup$ – Permian Mar 9 '16 at 11:55
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I think this is what you are looking for.

It is a quite interesting paper. I hope it helps.

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  • $\begingroup$ I think the emphasis was on public listed vs privately managed and not government vs private management $\endgroup$ – Permian Aug 12 '18 at 21:18

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