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THE ATTRACTIVENESS OF EASTERN EUROPE FOR PRIVATE EQUITY INVESTORS
Abstract
This research studies Eastern Europe’s attractiveness for private equity investors in terms of each of the seven main drivers identified by the following authors : Black and Gilson (1998), Gompers and Lerner (1998), Jeng and Wells (2000), Romain and de La Potteria (2004), Felix et al. (2007), Groh (2009), respectively Bernoth and Colavecchio (2014). We use aggregated data from Eastern European private equity market during 2000–2013 as well as macroeconomic data, to estimate a panel data model. The main seven drivers considered by the literature were: GDP growth, market capitalization, R&D expenditures, interest rates, unemployment rate, corruption and uncertainty. This paper also studies the dynamics of the main macroeconomic indicators for the following countries: Bulgaria, the Czech Republic, Poland, Romania, the Baltic States, the former Yugoslavia, Ukraine and Hungary. The main conclusion is that the private equity funds are concerned by the country risk which is reflected by the level of the interest rate and they also look to the level of unemployment and to the level of uncertainty index.
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References14
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