Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies

Bibliographic Details
Main Author:	Turetsky, Abraham I.
Language:	English
Published:	Case Western Reserve University School of Graduate Studies / OhioLINK 2018
Subjects:	Management performance heterogeneity non-normal distributions power laws private equity manufacturing-service continuum
Online Access:	http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863

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spelling	ndltd-OhioLink-oai-etd.ohiolink.edu-case15227198546678632021-08-03T07:05:42Z Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies Turetsky, Abraham I. Management performance heterogeneity non-normal distributions power laws private equity manufacturing-service continuum Private equity (PE) is a $3.0 trillion segment of the global investment management industry, which consists of fund managers that acquire, manage, and sell companies (also known as "portfolio companies"). In this dissertation, I study portfolio-company growth-rate heterogeneity and its management implications. Researchers have long argued that portfolio companies warrant study because PE fund managers exercise agency in adding value to them. Extant research into predictors of these growth rates has recognized that growth is not normally distributed, but rather shows a long right tail of outperformers. However, these studies have generally not attempted to learn anything from these distribution shapes. Rather, they have most often merely attempted to statistically normalize the shapes to facilitate Gaussian analysis. In contrast, I use recent distribution fitting techniques to identify specific, recognizable shapes that are good fits to 24 theoretically driven cuts of PE portfolio company growth data. I build upon extant management and economics literature to argue that these shapes can provoke theoretical insights that can be useful in examining predictors of performance. I also demonstrate empirically that identifying better fitting distribution shapes can produce higher quality parameterizations of this data. I then build upon these theoretical and empirical points to argue that researchers faced with similar non-Gaussian distributions should not rely exclusively on Gaussian statistics for their analyses, but they should rather allow for tools that accommodate the empirical distributions that they find. They should also focus specific attention on right-tail (outperforming) and/or left-tail (underperforming) outliers, depending upon the identified distribution. For theoretical purposes, I situate this work within two lines of management literature. The first is the aforementioned line that studies portfolio company growth rates. The second is a line of research into differences in heterogeneity between the services and manufacturing sectors. 2018-06-04 English text Case Western Reserve University School of Graduate Studies / OhioLINK http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863 http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863 unrestricted This thesis or dissertation is protected by copyright: all rights reserved. It may not be copied or redistributed beyond the terms of applicable copyright laws.
collection	NDLTD
language	English
sources	NDLTD
topic	Management performance heterogeneity non-normal distributions power laws private equity manufacturing-service continuum
spellingShingle	Management performance heterogeneity non-normal distributions power laws private equity manufacturing-service continuum Turetsky, Abraham I. Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies
author	Turetsky, Abraham I.
author_facet	Turetsky, Abraham I.
author_sort	Turetsky, Abraham I.
title	Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies
title_short	Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies
title_full	Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies
title_fullStr	Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies
title_full_unstemmed	Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies
title_sort	making heads and tails of distributional patterns: a value-creation-type and sector-based analysis among private-equity-owned companies
publisher	Case Western Reserve University School of Graduate Studies / OhioLINK
publishDate	2018
url	http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863
work_keys_str_mv	AT turetskyabrahami makingheadsandtailsofdistributionalpatternsavaluecreationtypeandsectorbasedanalysisamongprivateequityownedcompanies
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Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies

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