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Turetsky Dissertation - FINAL.pdf (3.53 MB)

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

Turetsky, Abraham I
http://orcid.org/0000-0003-3546-115X
http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863

Abstract Details

2018, Doctor of Philosophy, Case Western Reserve University, Management.
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.
Jagdip Singh, PhD (Committee Chair)
Corinne Coen, PhD (Committee Member)
Philip Cola, PhD (Committee Member)
G. Christopher Crawford, PhD (Committee Member)
Lori Kendall, PhD (Committee Member)
152 p.
Management
performance heterogeneity; non-normal distributions; power laws; private equity; manufacturing-service continuum

Recommended Citations

Citations

  • Turetsky, A. I. (2018). Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies [Doctoral dissertation, Case Western Reserve University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863

    APA Style (7th edition)

  • Turetsky, Abraham. Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies. 2018. Case Western Reserve University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863.

    MLA Style (8th edition)

  • Turetsky, Abraham. "Making Heads and Tails of Distributional Patterns: A Value-Creation-Type and Sector-Based Analysis Among Private-Equity-Owned Companies." Doctoral dissertation, Case Western Reserve University, 2018. http://rave.ohiolink.edu/etdc/view?acc_num=case1522719854667863

    Chicago Manual of Style (17th edition)

case1522719854667863
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This open access ETD is published by Case Western Reserve University School of Graduate Studies and OhioLINK.