Does Private Equity Improve Best Practices of Small Business? Evidence from Italy

"The contribution of private equity investors to the growth of small medium firm (SMEs) has been for a long time investigated starting at the beginning of the 1960s in the United States. An increasing number of operations of opening up of share capital of SMEs with high growth potential and problems related to entrepreneurship have been investigated, underlying the interest of the topic in the literature of last thirty years.. This paper is focused on the contribution of private equity investors on the adoption of best practices for SME in Italy, a market characterized by a large number of small firms mainly recognized as family business, so that with a “low quality” of corporate governance. In particular, considering a sample of backed firms, the paper provides evidences on the contribution of a long term relationship between small firms, with high growth potential but low level of professionalization, and private equity investors. Results are shown."