Determinants of Private Equity Investments across the BRICS Countries

Abstract

The determinants of private equity investments (particularly venture capital investments) have been studied extensively across developed economies, but this is not the case across emerging markets. This study primarily focuses on the determinants of private equity (inclusive of all sub-classes) among the BRICS countries. Six macroeconomic and market-related explanatory variables, including the Corruption Perception Index, are examined. Private equity funds raised across BRICS serve as the proxy for private equity investments. The study reveals that GDP growth and real interest rate are both statistically significant and positively related to private equity investments across the BRICS countries. Furthermore, market capitalization growth and corporate tax rates are statistically significant, and both are found to be negatively related to the dependent variable.

TOPICS: Private equity, emerging, statistical methods, legal/regulatory/public policy