The Impact of Private Equity Investment on EnterprisesA Review

Private Equity (PE) Investment has developed rapidly in the past decades. Many researches indicate that private equity impact enterprises in various ways. This paper explores the impact of PE investment on enterprises from three perspectives: company development, innovation and employment through literature review. PE investment improves the performance and the innovation of the enterprises. Although PE investment may cause labor loss in the short term, it brings positive effects (e.g. higher deal rate) to the employment of the PE-backed firms. The research in this paper has certain practical guiding significance for enterprises, investors and government departments. For enterprises, they can have a deeper understanding of the impact of private equity investment and choose financing methods reasonably, optimize capital structure and improve enterprise value. For investors, the research in this paper will help them better grasp the risks and returns of private equity investment and improve the scientific nature of investment decisions. For government departments, the research in this paper is helpful to understand the practical application of private equity investment in enterprises, and provides reference for formulating and improving relevant policies.