Global leveraged buyout deal performance: A cross-border cross-cultural perspective

Using a novel and comprehensive dataset, we find that the deal values of cross-border private equity-backed leveraged buyouts are significantly larger than domestic ones, but after controlling for the effects of diseconomies of scale, the performance of cross-border deals is not significantly different from domestic deals. We identify three channels to enhance cross-border leveraged buyout performance: more deal experience of the private equity sponsor, reduced communication costs, and spillover effects of institutional quality from the sponsor country to the target.