Private Equity Characteristics, Corporate Governance and Firm Value: Empirical Evidence from Small and Medium-sized Enterprises*

To extend existing research, this study examines whether private equity (PE) and corporate governance affect firm value using empirical data on the small and medium-sized boards of listed initial public offering companies in China. The empirical results show that PE investment can raise firm value as well as affect management behavior at the macro level. At the micro level, the greater PE firms' shareholding, the higher is firm value, which is positively influenced by the time the PE stake has been held. PE reputation and foreign PE are also positively related to firm value. Finally, corporate governance plays a partial mediating role in the relationship between PE investment and firm value.