Determinants of private equity capital in emerging markets : evidence from macroeconomic and development variables

This paper examines the determinants of private equity capital fundraised and invested for a panel dataset consisting of 34 emerging market nations. My analysis considers the impact of 12 macroeconomic and development variables, finding 7 of 12 to be significant in some capacity. Of these, Investment as a % of GDP was particularly significant for fundraised capital, while Control of Corruption was particularly significant for invested capital. Unsurprisingly, emerging markets are markedly different from developed nations, and this difference is manifested in the characteristics of private equity in emerging markets vs. developed nations as well. Emerging market nations require a different type of capital to aid their development, and offer up a unique opportunity for both impact and profit. My analysis shows that there are differences in the determinants for Invested and Fundraised capital, and investigating further into both forms of capital is a worthwhile future undertaking. In addition, while development variables are considered as a part of this analysis, there is a significant lack of data available for analysis on all the nations, and as more data is collected more significant research should be undertaken to understand the impact of development variables on private equity capital, and vice versa