The Routledge Companion to Management Buyouts

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ENTREPRENEURSHIP, CONTEXT, AND BUYOUTS

Mike Wright

Introduction

Leveraged buyouts (LBOs) and private equity (PE)-backed buyouts are typically associated with improving firm efficiency through reducing agency costs, restructuring, cost cutting, divestments, employment reductions, etc. Yet some buyouts have also pursued significant entrepreneurial and innovative trajectories (Wright et al., 2001a; Loihl & Wright, 2002).

This chapter sets out to provide a review and synthesis of the theory and systematic empirical evidence relating to entrepreneurship in management buyouts (MBOs). We adopt a Schumpeterian view of entrepreneurial activity, which encompasses new product and market development, product and service innovation, and asset and organizational ...