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Statistical Brief: Do LBO’s Profit After R&D Cuts?

Report Number SB/95-14

The leveraged buyout (LBO) wave of the 1980’s engendered over 2,000 LBO’s in the United States, involving companies with roughly $250 billion in assets.

According to a study of companies that underwent an LBO during the interval 1981-87, estimates of the average decline in research and development (R&D) spending was between 29 and 47 percent — and yet, average profits improved.

The study uses data from the National Science Foundation Survey of R&D and the Quarterly Financial Report. Both data sets are collected by the Bureau of the Census.

Page Last Revised - October 8, 2021
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