Essays on leveraged buyouts

This dissertation consists of three chapters on private equity (PE) investments. The first chapter studies the earnings manipulation preceding the public-to-private leveraged buyouts (LBOs), the incentives underlying the earnings manipulation, and the effectiveness of accounting regulation (the revised Corporate Governance Code of 2003) on alleviating earnings manipulation. The second and third chapters focus on the private-to-private LBOs (private LBOs). Chapter 2 investigates why some private LBOs are backed by PE firms (rather than by banks) and how these deals fare in the aftermath. Chapter 3 examines the role of private equity firms in the build-up of professional teams as well as leadership changes in private LBOs. I document that the human capital role of PE investors goes beyond that of the traditional financial institutions that provide capital and monitoring.