40621

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 restructuring (Schumpeter, 1934; Thompson & Wright, 1988). We then develop themes for further research before concluding with some implications for practice.

Theory and entrepreneurship

Agency theory and the strategic entrepreneurship perspective provide complementary bases for the theoretical understanding of entrepreneurship in buyouts (Meuleman et al., 2009). The strategic entrepreneurship perspective emphasizes the importance of an entrepreneurial mindset in identifying and exploiting opportunities and of entrepreneurial leadership in managing the firm’s resources and capabilities (Ireland et al., 2003).

Wright et al. (2000, 2001a) develop a conceptual framework to understand the mindsets of managers and entrepreneurs involved in MBOs. They identify four types of buyouts (Figure 21.1).

The traditional control and incentive mechanisms associated with buyouts that aim to address agency cost problems may generate efficiency enhancements, giving rise to efficiency buyouts (Quadrant 1). Significant equity ownership in a buyout introduces high powered managerial incentives, high leverage in the deal provides pressure to perform so as to service interest payments, while active monitoring by PE backers provides a complementary system that is particular applicable to mature firms with significant agency problems and free cash flows that would otherwise be diverted to inefficient diversification. In these cases, enhanced monetary incentives lead executives to improve the efficiency of the firm.

407

Figure 21.1      Buyout typology

Source: Adapted from Wright et al. (2001a).

Large diverse corporations typically develop bureaucratic measures based on objective information to ensure performance of their various divisions. While these measures may help in coordination, they likely constrain entrepreneurial activity related to innovation and experimentation which relies on more subjective information. Divisions of state-owned corporations may also be constrained, especially if they are peripheral parts of a loss-making firm that is heavily cash constrained (Thompson et al., 1990; Wright et al., 1993, 1994; Wieser et al., 1997). These problems may be exacerbated by the socio-political goals imposed on state-owned corporations that restrict their ability to expand and diversify their customer base. Similarly, local government service providers may be constrained if they are prevented from taking advantage of opportunities to expand their client base by local government control (Robbie & Wright, 1996). Separating a division from the private sector parent or through privatization from the state sector by means of a buyout may relax these restrictions. These aspects may be writ large in former centrally planned economies where buyouts were an important mechanism associated with the evolution to a market economy (Karsai & Wright, 1994; Wright, 1994).

Even though a PE investor may put in place its own monitoring, the buyout results in management having greater degrees of freedom in deciding the direction of the business firm, rather than having to adopt the corporate controls designed to optimize parental goals. 408If the new owner-managers have a managerial mindset, they may engage in only incremental or catch-up entrepreneurial activities, creating revitalization buyouts (Quadrant 2). Buyouts from state-owned firms have been found to engage in this type of entrepreneurial activity, such as in the case of Unipart (Wright et al., 2000). Incentivized through direct ownership following a privatization buyout, employees are also reported to identify and communicate entrepreneurial opportunities to access new customers that they did not do previously (Bradley & Nejad, 1989).

In contrast to the previous quadrants, an entrepreneurial cognition or mindset means that managers buying out may be able to pursue entrepreneurial opportunities through the use of heuristics that they had identified under the previous ownership regime, but which they were unable to exploit because the constraints of a larger corporation meant that they would need to provide systematic evidence relating to the opportunity which may not have been available in the uncertain context associated with entrepreneurship. The resultant buyouts are entrepreneurial buyouts (Quadrant 3) and involve managers with idiosyncratic skills who may be able to process such incomplete information in contrast to those managers who respond well to close monitoring to prevent shirking. Examples of this type of buyout may arise in technological sectors where in contrast to division managers, parent corporation managers lack the capability to understand or manage the technology, but where divisional management do. There is quite strong survey evidence that demonstrates that managers are motivated to undertake the buyout as it affords them the scope to be able to develop strategic opportunities stymied under the previous owners, as well as to control their own destiny (Wright & Coyne, 1985). In the US, managers of the clothing store chain Kohl’s acquired the business out of BAT, a large diversified conglomerate, following the purchase with the introduction of a range of innovations such as new store design as well as transforming it into a hybrid discounter/department store.

A variant of Quadrant 3 involves cases where entrepreneurial owner-managers have the capabilities and incentives to pursue entrepreneurial activities from start-up through to and beyond IPO, but where control mechanisms fail to develop at the same pace. Such firms may subsequently encounter financial problems, generating the opportunity for a busted tech buyout. That is, a buyout can be negotiated to introduce the appropriate governance mechanisms to better monitor and control the continued or renewed exploitation of entrepreneurial opportunities. In 2000, the struggling disk drive company Seagate Technology underwent a public-to-private buyout so that, away from the short-term demands of stock market analysts, it would be able to restructure and develop new innovative products with higher margins. By 2002, Seagate returned to the stock market, and by August 2003 was named the number one company for innovation and enterprise in disc drives by VAR Business Magazine.

Entrepreneurial buyouts may need a degree of leverage below the norm for buyouts in mature sectors in order that it can use cash flow to develop new opportunities rather than to service interest payments. These buyouts may also need a PE investor with significant expertise in being able to help the buyout be entrepreneurial, rather than just the traditional monitoring skills. However, a mismatch may arise between the availability of opportunities, the governance mechanisms provided by the PE firm, and the financing structure, as well as the mindset of managers, leading to a buyout failure case (Quadrant 4).

As we have seen elsewhere in this volume (Howorth and Robinson, Chapter 9 and Ahlers et al., Chapter 8) buyouts can be used to facilitate the continuance of a family firm. Controlling ownership in the family firm can be acquired by non-family managers. An MBO may preserve the family identity and culture of the firm, perhaps in a transformed manner (Howorth et al., 2016) and the psychic income of the former family owners can be maintained 409if they secure continuing involvement in the buyout such as providing networking links with suppliers and customers that the family has traded with for many years. Non-family managers may be able to identify and pursue entrepreneurial opportunities resisted prior to the buyout by family owner-managers who may have been more focused on agendas linked to family lifestyle instead of enhancing efficiency and profitability (Wright et al., 2001b). As such, the buyout may be essential to ensure the continued survival of the firm as an entity. When dominant family owners have not developed a strong non-family managerial cadre, managerial talent from outside the firm may be required (Wright et al., 2016). In buyout terms, this may mean acquisition by means of an MBI so as to pursue entrepreneurial opportunities that were being missed. However, there are potential pitfalls, such as failure to recognize that it is the founder who has the tacit knowledge required to make the business successful and that once s/he has departed entrepreneurial opportunities may be extremely challenging. Buybacks by founders of companies that have struggled after a buyout because of this problem are not uncommon.

The strategic entrepreneurship perspective also emphasizes the importance of the resources necessary for opportunities to be exploited. These resources relate to the human and social capital of the managers leading the buyout as well as the finance and human and social capital of PE backers relating to strategy, operations, marketing, and mergers and acquisitions (Meuleman et al., 2009), as well as sector expertise (Cressy et al., 2007). It may be necessary to bring in outside managers who possess the tacit knowledge and idiosyncratic skills required to seize new opportunities (Hendry, 2002). PE firms play an important role in identifying such individuals as well as providing the benefits of their networks and relationships with potential new customers and suppliers. Buyouts with entrepreneurial opportunities may need greater involvement from the PE investor to help develop entrepreneurial competencies through establishing new ventures/acquisitions, broadening market focus, and reviewing R&D, budgets, and marketing plans (Bruining & Wright, 2002).

The more experienced PE firms are through undertaking and successfully exiting deals, the more likely they are to develop a depth and breadth of their knowledge and networks relating to markets. Research from the venture capital sector has shown that such contacts provide privileged access to expert advice which might contribute to the identification and realization of entrepreneurial opportunities (Hochberg et al., 2005).

Buyouts with entrepreneurial potential may also need more intense PE involvement to enable them to identify and exploit such opportunities. PE firms may differ in the size of an investment executive’s portfolio. All else being equal, the greater the number of investments in a PE firm’s portfolio for a given number of executives, the more difficult it will likely be to devote sufficient time to providing the specialist knowledge required to develop new opportunities. PE investors seeking to provide added entrepreneurial value, therefore, may need to limit the size of their investment portfolio. Alternatively, they may need to recruit a larger, more experienced team, which may presents major challenges in the thin labor market in PE for such expertise (Wright et al., 2010).

Previous investment experience and intensity of involvement by PE firms may be particularly important in divisional buyouts that have been constrained by parental policies, since it means that PE firms are likely to have developed the expertise to monitor investees and help identify and exploit entrepreneurial opportunities.

The framework for understanding the different entrepreneurial mindsets and types of buyouts is a static one and says little about the temporal dynamics involved in the development of entrepreneurial activities. Bacon et al. (2013) distinguish short- and longer-term 410approaches to the development of growth following buyout, which may involve different entrepreneurial strategies.

Firms that remain with a buyout structure for a short period before exiting through a trade sale or IPO may provide scope to obtain capital and know-how for rapid growth. What Bacon et al. (2013) call “rapid rebounders,” these buyouts grow quickly by expanding current business activities. For example, the secondary buyout of Gondola engaged in entrepreneurial activities involving shared management services, the introduction of a professional marketing department and a commercially-oriented accounts department, the creation of a common supply chain, and rapid increases in the number of restaurants.

Some PE-backed buyouts create value from a long-term approach to ownership and an emphasis on organizational growth to increase value. PE firms allocate capital to better and more entrepreneurial executives and managers who introduce superior strategic and operational knowledge to improve performance. These buyouts require a long-term perspective since it takes time for entrepreneurial actions to raise the exit value of the buyout (Tåg, 2012).

Evidence on entrepreneurship in buyouts

Besides improvements in financial, economic, and employment performance resulting from efficiency improvements, reviewed in other chapters in this volume, evidence shows that MBOs may also have an impact on the entrepreneurial activities of portfolio firms (Wright et al., 2000, 2001a; Meuleman et al., 2009). In this section we review the evidence relating to entrepreneurial growth, which includes new product and market development as well as growth by acquisition, exporting, and innovation. We include evidence on the role of PE investors in facilitating entrepreneurial activity.

Entrepreneurial growth

Studies relating to the early wave of buyouts have shown that PE backing oftentimes results in an increase in new product development and extension of products into new markets (Wright & Coyne, 1985; Wright et al., 1992; Zahra, 1995), with buyouts engaging in asset and organizational restructuring to a greater extent than non-buyouts (Wiersema & Liebeskind, 1995). The evidence on the impact of buyouts on CAPEX and R&D expenditure is mixed (Lichtenberg & Siegel, 1990; Long & Ravenscraft, 1993), but there is some evidence that it is maintained in more innovative sectors and that better use is made of the expenditure that is made (Zahra, 1995). Divisional buyouts previously constrained by their parents particularly show evidence of entrepreneurial growth (Wright et al., 2000). Divisional buyouts that trade with their former parent typically are able to reduce their dependence on the former parent following buyout as they have greater discretion to seek new customers and markets (Wright, 1986).

The resources provided by PE firms’ experience are a significant driver of higher growth in divisional buyouts (Meuleman et al., 2009). Further, the intensity of PE involvement in portfolio companies is associated with higher growth.

The rationale for secondary mangeemnt buyouts (SMBOs) is oftentimes argued to be that a further buyout is required to exploit entrepreneurial growth opportunities as the benefits from efficiency improvements have largely been exhausted in the first buyout. In an SMBO, new PE investors may be introduced who believe they have the expertise to help grow the business, for example through internationalizing activities. Emerging evidence suggests that 411SMBOs struggle to achieve entrepreneurial growth unless backed by experienced PE firms (Degeorge et al., 2013) and oftentimes this is achieved through acquisitions rather than through organic growth (Wang, 2012). The classic buyout incentive and control mechanisms are not associated with growth in SMBOs (Zhou et al., 2014).

More recent evidence has attempted a more fine-grained assessment of the expertise of PE investors in helping the SMBO to grow. SMBOs with PE directors with high-level business education are significantly and positively associated with growth performance, while PE directors with complementary human capital to selling PE directors through high-level business education have better profitability/growth (Jelic et al., 2018).

Exporting

Exporting is an important entrepreneurial activity, typically involving different levels of risk compared with home markets (Wright et al., 2007). Studies of buyouts and PE have devoted little attention to exporting, yet the buyout may provide the conditions that both release a firm from the governance, risk orientation, and financing constraints imposed by a previous ownership regime (George et al., 2005), as well as providing monitoring and value-adding resources that help such firms to begin or increase exporting (Pruthi et al., 2003; Zahra et al., 2007).

Shortcomings in internal monitoring prior to the buyout may have led to sub-optimal internationalization behavior. Management may have been constrained by the former owners’ head office strategies and financial controls (Wright et al., 2000) that adversely impacted their ability to engage in export markets. They may also have opted for the easier option of home markets even though these may not have been the most profitable or may have not fully exploited international market opportunities. The buyout provides the ownership incentive and PE firm monitoring to encourage the new owner/managers to be both more entrepreneurial in seeking out new revenue sources from international markets as well as being more efficient in using their existing internal resources. Post-buyout the investors may introduce onto the board directors with wider networks and experience of export markets who can bring their relationships with corporate partners at home and overseas. The introduction of external PE monitoring resources will improve financial discipline in the firm and may help to overcome previous organizational inertia regarding exporting. PE firms may also be able to provide expertise and contacts that can facilitate exporting.

An initial study of exporting in PE-backed firms was based on a cross-sectional mailed questionnaire survey. Lockett et al. (2008), in a European study of 340 VC-backed firms that included PE-backed buyouts in the UK, argue and find support for the hypothesis that monitoring as opposed to value-adding inputs by PE firms will be more important for buyouts than for early stage VC-backed firms in assisting the international expansion of the business.

Building on general arguments and evidence from the exporting literature (Love & Roper, 2015), the introduction of PE investment may mean that better performing firms now select into exporting and/or the PE investor acts to increase the export intensity of buyout firms that already have some export experience via both further increases in efficiency and the exploitation of the PE representatives’ wider networks of relationships overseas.

Wilson and Wright (2017) explore exporting using a panel dataset covering the period 1998–2013 and involving 2.6 million company-level observations including PE-backed buyouts and other firms in the UK of which around 10% are actively engaged in exporting. Among the PE subsample around 23% were actively engaged in exporting and, on average, around 10% of sales were exported, higher than the population average. Controlling for 412other factors, they find that PE-backed buyouts are more likely to be internationalized (export propensity) than the control sample of non-buyouts. They find a positive and significant relationship between total factor productivity (TFP) and export propensity with firms with more know-how, innovation, and expertise being more likely to be exporters (Wilson & Wright, 2017).

With respect to export intensity (the share of sales that are exported), Wilson and Wright (2017) find a positive and significant coefficient on PE backing and a negative sign on a dummy variable relating to pre-PE investment, indicating an uplift in export performance of firms post-PE investment. Firms with PE backing appear to have a percentage export differential of 2–3% over the control group of non-PE-backed firms. The PE-backed buyouts were found to have a growth rate of 6.2% in export sales post-buyout compared to 5.9% in the same period for non-buyouts that were regular exporters. Moreover some 15% of buyouts that were not exporting pre-buyout became exporters. Interestingly, among PE backed buyouts, the mid-size range firms with an asset value of £10–£50m had a higher export intensity compared to larger PE-backed firms. The percentage of foreign nationals on the board has a positive and significant effect along with the average age and experience of the board directors on both export propensity and export intensity.

Innovation

Although covered in more detail in this volume in the chapter by Bertoni, MBOs can have an entrepreneurial impact in terms of changes to the firm’s innovative activities. The early evidence on R&D activity is mixed, but more recently, studies have also examined the impact of PE backing for buyouts on innovation activity as measured by the effectiveness of patenting activity (Ughetto, 2010; Lerner et al., 2011).

The study by Ughetto (2010) of the number of patents granted by the European Patent Office and the likelihood of filling at least one successful patent application in a sample of European buyouts, is interesting, because it shows that the innovation activity of buyouts is contingent on contextual factors relating to the characteristics of firms and different types of lead investors and their associated different goals and attitudes to risk and investment. There is also evidence that PE backing of buyouts leads to a release of financial constraints on patenting activity, notably in relation to patent citations (Amess et al., 2015), and that this shift is most pronounced in divisional and family firm buyouts.

Further research

We have identified evidence of the importance of MBOs in increasing entrepreneurial activity regarding both the propensity and intensity of exporting by the firms involved. Although we showed that board characteristics are influential regarding exporting, more refined analysis of board diversity and networks is needed to assess the added value of PE involvement. Further, the evidence on exporting lacks detail on the countries involved and further analysis is required. In particular, as yet, we have no insights into whether the increase in export intensity is due to an increase in exporting in countries where buyouts are already present or whether they enter new countries. Evidence is also needed on the exporting activity of different types of buyouts and buyouts from different vendor sources.

We showed theoretically that different types of buyouts may be expected to involve variations in cognition by the managers involved, notably whether they have a managerial or entrepreneurial mindset. However, at present we lack studies that measure empirically how 413the cognitive approach of these managers differs. Further, more fine-grained work is also needed to explore differences between managers involved in MBOs, management buyins, and SMBOs, and between these managers and other entrepreneurs such as those starting a venture.

In the general entrepreneurship literature there has been a heated debate on the extent to which entrepreneurial opportunities are discovered or created or involve elements of both (Alvarez & Barney, 2007; Busenitz et al., 2017). Research on entrepreneurial buyouts has yet to explore discovery and creation processes.

Although there have been recent developments in understanding entrepreneurial processes in traditional start-up ventures and academic spin-offs (Vohora et al., 2004; Rasmussen et al., 2014), we know little about the entrepreneurial process in MBOs. Bruining (this volume) considers resource orchestration processes in case studies of MBOs based on the constructs identified by Sirmon et al. (2007) in respect of corporations. However, the same constructs may not be appropriate for all types of ventures. For example, Baert et al. (2016) identify the resource orchestration constructs of sharing, transforming, and harmonizing in the context of portfolio entrepreneurship compared to larger corporations. In the context of MBOs, there is therefore a need to explore whether and to what extent distinctive resource orchestration constructs are present. Further, given our identification of different levels and types of entrepreneurial behavior, additional research may also seek to identify whether there are distinctive resource orchestration constructs associated with each.

Further extending this research lies the question of how buyouts change their resource orchestration processes from before the buyout compared with post-buyout. The different types of buyouts may also vary in this respect. A key question concerns which actor(s) initiate and lead the orchestration, that is, whether management or PE firms are the prime movers. From the perspective of the PE firm, an interesting issue concerns whether and to what extent they have a “template” approach that they apply to all of their portfolio or whether they adapt their approach as they learn from prior portfolio firm investments.

Process aspects introduce a temporal dimension to entrepreneurship in buyouts. We have referred to short- and long-term aspects of buyouts but, although there is extensive evidence on the longevity of buyouts (see the chapter by Jelic et al. in this volume), we still lack analysis of the contribution of entrepreneurial activities to the longevity of the buyout form. Further, it is unclear to what extent too much or too little entrepreneurial activity increases the likelihood of failure.

MBOs represent one type of entrepreneurial ownership mobility (Wright, 2016), that is organizational forms where changes in ownership may impact the ability of the actors to exploit entrepreneurial opportunities. Other types of entrepreneurial ownership mobility involve the spin-offs of inventions from universities by faculty scientists (Vohora et al., 2004; Wennberg et al., 2011), the transfer of ownership between generations of family firms (Miller et al., 2015), the geographical ownership mobility of returnee (Wright et al., 2008) and transnational entrepreneurs (Drori et al., 2009; Pruthi & Wright, 2017), the ownership mobility by habitual entrepreneurs as they create more ventures in their portfolio or sell one venture to create or acquire a subsequent one (Westhead & Wright, 2016), and the spinning off by employees of larger corporations to create new ventures. While there is a developing body of research on the entrepreneurial activities of these different types, additional research is warranted that attempts to synthesize and compare the relative impact of each type. With respect to buyouts, for example, to what extent are entrepreneurial opportunities more incremental than the entrepreneurial opportunities pursued through the other forms of entrepreneurial mobility? To what extent do the entrepreneurial opportunities in buyouts 414vary depending on whether managers are proactive in proposing a buyout or whether they are reacting to a decision by the parent to divest or close the division?

There is growing recognition that entrepreneurship may have a dark side in terms of its impact at societal and individual levels (Zahra & Wright, 2011). At the societal level entrepreneurship may have adverse impacts on the environment, on working conditions, etc. At the individual level, entrepreneurship may be associated with stress, family tension, and break-ups, etc. The debate involving PE-backed buyouts that exploded during the first and second waves of the phenomenon considered dark side questions about the potential adverse impacts on employment, investment, and R&D in particular based on notions of short-termism and cost efficiencies. Further research is needed regarding the extent to which board involvement by investors in buyouts can constrain excessive entrepreneurial risk-taking by management. While there are well-recognized agency costs of debt, especially for managers with little equity ownership, managers taking on high levels of corporate debt in a buyout as well as potentially second mortgages on their homes and guarantees may be under greater personal and family stress than they were as employees. To what extent does this impact the nature of their entrepreneurial risk-taking exploiting entrepreneurial opportunities? How can PE firms address these concerns? Do managers become more risk averse or less able to focus on identifying and exploiting opportunities? To what extent are the dark sides of buying out for managers greater than in the case of start-up entrepreneurs and top management in larger corporations?

Finally, a potential dark side to entrepreneurial activities in buyouts concerns the extent to which managers buying out exploit information regarding entrepreneurial opportunities by not disclosing this to pre-buyout owners. These concerns have been heightened in respect of buyouts that are exited within very short periods after deal completion. This has been especially an issue with respect to buyouts of formerly state-owned enterprises. On the one hand, this may mean that managers effectively buy the firm at below its “true cost.” On the other, to the extent that the perceptions of these opportunities are subjective, they may be viewed as returns to managers’ human capital that are not being recognized by current owners. These issues may potentially be greater in peripheral divisions of large conglomerates and state-owned firms, the latter especially in weak institutional environments. There has been some discussion of the potential ethical problems in buyouts in relation to pricing (Sun et al., 2010). Auctions and clawback mechanisms have been proposed as potential solutions to this problem, rather than allowing management to be the preferred or even sole bidder. However, such processes may do little to solve asymmetric information problems that serve to advantage management insiders at the expense of vendors and competing bidders, especially in respect of sales of divisions that did not have separate accounts prior to the sale. Further more fine-grained research is needed that focuses on “unproductive” entrepreneurial behavior in this context.

Conclusions

In this chapter we have explored the theoretical and empirical evidence relating to entrepreneurial aspects of MBOs. We have also shown that the nature of entrepreneurship in buyouts may be contingent on the particular context, notably the vendor context, from which the deal emanated. In particular, buyouts from divisions and family firms seem to fare better than secondary buyouts and, especially during the second wave of buyouts, public-to-private buyouts (Guo et al., 2011).

The studies reviewed in this chapter have important implications for buyout practice. The scope for entrepreneurial activities suggests that practitioners may be able to generate 415significant returns in buyout deals rather than relying simply on efficiency gains. This route may offer interesting options for investors in the light of evidence of declining portfolio returns (Kaplan & Sensoy, 2015). However, caveats are in order. First, there is a need to develop expertise in the buyouts themselves but also in the PE backers that have the capability and level of involvement to undertake entrepreneurial actions. Such expertise relates particularly to board members with sector, exporting experience, and networks. Second, the ability to generate high returns from entrepreneurship in secondary buyouts appears, on average, to be particularly difficult. This is a specific concern given that the value of secondary buyouts completed annually exceeds that for primary buyouts. A major challenge therefore for investors concerns their ability to be able to identify sufficient primary buyouts with entrepreneurial potential.

References

Alvarez, S., & Barney, J. 2007. Discovery and creation: Alternative theories of entrepreneurial action. Strategic Entrepreneurship Journal, 1: 11–26.

Amess, K., Stiebale, J., & Wright, M. 2015. The impact of private equity on firms’ innovation activity. European Economic Review, 86: 147–160.

Bacon, N., Wright, M., Ball, R., & Meuleman, M. 2013. Private equity, HRM and employment. Academy of Management Perspectives, 27: 7–21.

Baert, C., Meuleman, M., Debruyne, M., & Wright, M. 2016. Portfolio entrepreneurship and resource orchestration. Strategic Entrepreneurship Journal, 10: 346–370.

Bradley, K., & Nejad, A. 1989. The NFC buyout. Cambridge, UK: Cambridge University Press.

Bruining, H., & Wright, M. 2002. Entrepreneurial orientation in management buy-outs and the contribution of venture capital. Venture Capital, 4: 147–168.

Busenitz, L., Dimov, D., Fiet, J., McMullen, J., Gregoire, D., & Wright, M. 2017. Debate about the nature of entrepreneurial opportunities. In C. Léger-Jarniou & S. Tegtmeier (Eds.), Opportunity formation. Cheltenham, UK: Edward Elgar.

Cressy, R., Malipiero, A., & Munari, F. 2007. Playing to their strengths? Evidence that specialization in the private equity industry confers competitive advantage. Journal of Corporate Finance, 13: 647–669.

Degeorge, F., Martin, J., & Phalippou, L. 2013. The consequences of secondary buyouts for private equity investors. Paper presented at the Coller Institute Conference on Private Equity, London Business School.

Drori, I., Honig, B., & Wright, M. 2009. Transnational entrepreneurship: An emergent field of study. Entrepreneurship Theory and Practice, 33: 1001–1022.

George, G., Wiklund, J., & Zahra, S. A. 2005. Ownership and the internationalization of small firms. Journal of Management, 31: 210–233.

Guo, S., Hotchkiss, E., & Song, W. 2011. Do buy-outs (still) create value? Journal of Finance, 66: 479–517.

Hendry, J. 2002. The principal’s other problems: Honest incompetence and the specification of objectives. Academy of Management Review, 27: 98–113.

Hochberg, Y., Ljungqvist, A., & Lu, Y. 2005. Whom you know matters: Venture capital networks and investment performance. Journal of Finance, 62: 251–301.

Howorth, C., Wright, M., Westhead, P., & Allcock, D. 2016. Company metamorphosis: Professionalization waves, family firms and management buyouts. Small Business Economics, 47: 803–817.

Ireland, R. D., Hitt, M. A., & Sirmon, D. G. 2003. Strategic entrepreneurship: The construct and its dimensions. Journal of Management, 29: 963–989.

Jelic, R., Zhou, D., & Wright, M. 2018. Sustaining the buyout governance model: Inside secondary management buyout boards. British Journal of Management, forthcoming.

Kaplan, S., & Sensoy, B. 2015. Private equity performance: A survey. Charles A. Dice Center Working Paper No. 2015-10.

Karsai, J., & Wright, M. 1994. Accountability, governance and management buy-outs in Hungary. Europe-Asia Studies, 46: 997–1016.

Lerner, J., Sørensen, M., & Strömberg, P. 2011. Private equity and long-run investment: The case of innovation. The Journal of Finance, 66: 445–477.

Lichtenberg, F., & Siegel, D. 1990. The effect of leveraged buyouts on productivity and related aspects of firm behavior. Journal of Financial Economics, 27: 165–194.

Lockett, A., Wright, M., Burrows, A., Scholes, L., & Paton, D. 2008. Export intensity of venture capital backed companies. Small Business Economics, 31: 39–58.

Loihl, A., & Wright, M. 2002. Seagate Technology Case. CMBOR, Nottingham University Business School.

Long, W. F., & Ravenscraft, D. 1993. LBOs, debt and R & D intensity. Strategic Management Journal, 14: 119–135.

Love, J., & Roper, S. 2015. SME innovation, exporting and growth: A review of existing evidence. International Small Business Journal, 33: 28–48.

Meuleman, M., Amess, K., Wright, M., & Scholes, L. 2009. Agency, strategic entrepreneurship and the performance of private equity backed buyouts. Entrepreneurship Theory and Practice, 33: 213–240.

Miller, D., Wright, M., Lebreton-Miller, I., & Scholes, L. 2015. Resources and innovation in family businesses: The Janus-face of family socio-emotional preferences. California Management Review, 58: 20–40.

Pruthi, M., & Wright, M. 2017. Social ties, prior experience and venture creation by transnational entrepreneurs. International Journal of Entrepreneurship and Small Business, DOI: 10.1504/IJESB.2019.10010772..

Pruthi, S., Wright, M., & Lockett, A. 2003. Do foreign and domestic venture capital firms differ in their monitoring of investees? Asia Pacific Journal of Management, 20: 175–204.

Rasmussen, E., Mosey, S., & Wright, M. 2014. The influence of university departments on the evolution of entrepreneurial competencies in spin-off ventures. Research Policy, 43: 92–106.

Robbie, K., & Wright, M. 1996. Local authorities, compulsory competitive tendering and buy outs. Local Government Studies, 22: 127–146.

Schumpeter, J. 1934. The theory of economic development: An inquiry into profits, capital, credit, interest and the business cycle. Piscataway, NJ: Transaction Publishers.

Sirmon, D. G., Hitt, M., & Ireland, R. D. 2007. Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review, 32: 273–292.

Sun, P., Wright, M., & Mellahi, K. 2010. Is entrepreneur-politician alliance sustainable during transition? The case of management buyouts in China. Management & Organization Review, 6: 101–122.

Tåg, J. 2012. The real effects of private equity buyouts. In D. Cumming (Ed.), The Oxford handbook of private equity. Oxford, UK: Oxford University Press, 271–299.

Thompson, S., & Wright, M. 1988. Internal organization, efficiency and profit. Deddington, UK: Philip Allan.

Thompson, S., Wright, M., & Robbie, K. 1990. Management buy-outs and privatisation: Organisational form and incentive issues. Fiscal Studies, 11: 71–88.

Ughetto, E. 2010. Assessing the contribution to innovation of private equity investors: A study on European buyouts. Research Policy, 39: 126–140.

Vohora, A., Wright, M., & Lockett, A. 2004. Critical junctures in spin-outs from universities. Research Policy, 33:147–175.

Wang, Y. 2012. Secondary buyouts: Why buy and at what price? Journal of Corporate Finance, 18: 1306–1325.

Wennberg, K., Wiklund, J., & Wright, M. 2011. The effectiveness of university knowledge spillovers: Performance differences between university spinoffs and corporate spinoffs. Research Policy, 40: 1128–1143.

Westhead, P., & Wright, M. 2016. The habitual entrepreneur. London: Routledge.

Wiersema, M., &. Liebeskind, J. 1995. The effects of leveraged buyouts on corporate growth and diversification within large firms. Strategic Management Journal, 16: 447–460.

Wieser, O., Wright, M., & Robbie, K. 1997. Austrian buy-outs from the public sector. Annals of Public and Cooperative Economics, 68: 689–712.

Wilson, N. & Wright, M. 2017. Private equity and exporting. Report prepared for British Venture Capital Association.

Wright, M. 1986. The make-buy decision and managing markets: The case of management buy-outs. Journal of Management Studies, 23: 443–464.

Wright, M. (ed.) 1994. Technical note on management and employee buy-outs in Central and Eastern Europe. EBRD/CEEPN, January 1994.

Wright, M. 2016. The conquest of interestingness: Entrepreneurial ownership mobility. In D. Audretsch & E. Lehmann (Eds.), Companion to makers of modern entrepreneurship. New York: Routledge.

Wright, M., & Coyne, J. 1985. Management buyouts. Beckenham, UK: Croom Helm.

Wright, M., DeMassis, A., Scholes, L., Kotlar, J., & Hughes, M. 2016. Entrepreneurship and family business. London: Institute for Family Business.

Wright, M., Filatotchev, I., Buck, T., & Robbie, K. 1994. Accountability and efficiency in privatisation by buy-out in CEE. Financial Accountability and Management, 10: 195–214.

Wright, M., Hoskisson, R., & Busenitz, L. 2001a. Firm rebirth: Buyouts as facilitators of strategic growth and entrepreneurship. The Academy of Management Executive, 15: 111–125.

Wright, M., Hoskisson, R., Busenitz, L., & Dial, J. 2000. Entrepreneurial growth through privatization: The upside of management buyouts. Academy of Management Review, 25: 591–601.

Wright, M., Hoskisson, R., Busenitz, L., & Dial, J. 2001b. Finance and management buy-outs: Agency versus entrepreneurship perspectives. Venture Capital, 3: 239–261.

Wright, M., Jackson, A., & Frobisher, S. 2010. Private equity: Building the new future. Journal of Applied Corporate Finance, 22: 86–95.

Wright, M., Liu, X., Buck, T., & Filatotchev, I. 2008. Returnee entrepreneur characteristics, science park location choice and performance: An analysis of high technology SMEs in China. Entrepreneurship Theory and Practice, 32: 131–156.

Wright, M., Thompson, S., & Robbie, K. 1992. Venture capital and management-led leveraged buy-outs. Journal of Business Venturing, 7: 47–71.

Wright, M., Thompson, S., & Robbie, K. 1993. Financial control in privatisation by management buy-out. Financial, Accountability and Management, 9: 75–99.

Wright, M., Westhead, P., & Ucbasaran, D. 2007. Internationalisation by SMEs: A critique and policy implications. Regional Studies, 41: 1013–1030.

Zahra, S. 1995. Corporate entrepreneurship and financial performance: The case of management leveraged buyouts. Journal of Business Venturing, 10: 225–247.

Zahra, S., Neubaum, D. O., & Naldi, L. 2007. The effects of ownership and governance on SMEs’ international knowledge-based resources. Small Business Economics, 29: 309–327.

Zahra, S., & Wright, M. 2011. The other side of paradise: Examining the dark side of entrepreneurship. Entrepreneurship Research Journal, 1: 1–5.

Zhou, D., Jelic, R., & Wright, M. 2014. SMBOs: Buying time or improving performance? Managerial and Decision Economics, 35: 88–102.