Driving change? A systematic exploration of private equity and innovation

Purpose While private equity (PE) has become a dominant actor in global corporate ownership, its implications for innovation remain fragmented and contested. Existing reviews either conflate PE with venture capital or neglect governance mechanisms that link financial control to inventive activity. This study addresses this research gap through one of the first systematic literature reviews dedicated exclusively to the relationship between PE and innovation. Design/methodology/approach Following a six-stage systematic literature review (SLR) procedure, the paper integrates bibliometric mapping, recursive co-citation clustering and qualitative content analysis across 1,110 peer-reviewed studies published between 1999 and 2023. This process ensures both sufficient coverage and analytical depth, combining quantitative mapping with theory-driven synthesis. Findings The review identifies five conceptual pathways through which PE ownership affects innovation: capital reallocation, strategic refocusing, managerial professionalization, network leverage and commercialization acceleration. Overall, generated evidence points to predominantly neutral-to-positive innovation effects, although outcomes vary significantly by deal type, leverage, sector and institutional setting. Originality/value This paper is to the knowledge of these authors the first cross-disciplinary synthesis exercise connecting financial governance with innovation systems theory, thereby transforming PE from a financial intermediary mechanism into a multi-mechanism institutional actor influencing corporate inventive effort. It consolidates two decades of dispersed findings into an integrative contingency framework guiding both scholars and policymakers toward understanding when and how PE fosters technological progress.