<p>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?</p>

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2016-01-10T13:07:01.287Z
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?
Giskard
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2016-01-10T13:24:48.057Z
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.
Trajan
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2016-01-10T23:22:12.773Z
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 : http://www.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.
Hector
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2016-01-11T10:45:48.050Z
@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.
Trajan
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2016-03-09T11:55:05.307Z
Please put long comments as answers if they answer the question
Trajan
<microeconomics><reference-request><finance><corporate-finance><firm>
Academic paper which justifies why companies are run better privately
Trajan
# Academic paper which justifies why companies are run better privately

(Asked by: username_0 on 2016-01-10)

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?

**Tags:** microeconomics, reference-request, finance, corporate-finance, firm
> **Comments:**
> **username_1**: 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?  
> **username_0**: 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.  
> **username_2**: 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 : http://www.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.  
> **username_0**: @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.  
> **username_0**: Please put long comments as answers if they answer the question  

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## 0 answers

