Work

Private Equity Buyouts and Workplace Safety

Year: 2021

Type: article

Abstract: This paper presents evidence of a large, persistent decline in establishment-level workplace injury rates after private equity (PE) buyouts of publicly traded U.S. firms. We find that firms experience fewer OSHA safety violations after buyouts and that a larger decline in injury rates is associated with an increased probability of exit via IPO. Employment reductions after buyouts are concentrated in relatively low-injury-risk establishments. Overall, our results suggest that buyouts improve workplace safety and that PE acquirers benefit from this improvement. We explore possible causes of these changes through interviews with executives of companies acquired in buyouts and through cross-sectional analysis.

Source: Review of Financial Studies

DOI: 10.1093/rfs/hhab001

Authors: Jonathan Cohn, Nicole Nestoriak, Malcolm Wardlaw

Institutions: The University of Texas at Austin, Bureau of Labor Statistics, University of Georgia

Language: English

Topic: Private Equity and Venture Capital

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Good health and well-being

Open Access status: green

OpenAlex ID: W2549907004

FWCI: 39.04

Cites: 51

Cited by: 174

Related to: 10