This sounds way too much like a cached thought to me. I’d like to see empirical data for that.
Note that privately held companies includes both companies held by a family (which tend to be less well managed because of the frictional costs associated with replacing upper management) and companies held by private equity firms (which tend to be well-managed). The NBER paper gwern linked through Hanson is available here, and if that link doesn’t work for you I can email you a pdf.
A quote from it:
Table 1 also shows that private firms have higher profits, less cash, and more debt, even after we match on size and industry.
Thanks for the link, it works. The paper’s interesting but will take a bit of time to dig through and I can already see some iffy things in there (e.g. using sales growth as the measure of investment opportunities available). But I’ll hold off expressing opinions until I read through it...
Note that privately held companies includes both companies held by a family (which tend to be less well managed because of the frictional costs associated with replacing upper management) and companies held by private equity firms (which tend to be well-managed). The NBER paper gwern linked through Hanson is available here, and if that link doesn’t work for you I can email you a pdf.
A quote from it:
Thanks for the link, it works. The paper’s interesting but will take a bit of time to dig through and I can already see some iffy things in there (e.g. using sales growth as the measure of investment opportunities available). But I’ll hold off expressing opinions until I read through it...