Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 3rd International Conference on Business and Policy Studies
Series Vol. 68 , 05 January 2024
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The Correlation Between the Macroeconomic Indicator PMI and Private Equity Investment
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Abstract
This paper presents an in-depth analysis of the correlation between China’s manufacturing PMI and private equity investment from 2015 to 2022, utilizing correlation and regression analysis methods based on both overall and structural data. The findings reveal a moderate correlation between manufacturing PMI and private equity investment. Specifically, manufacturing PMI demonstrates a predictive effect on private equity investment, with a lead time of one to two quarters. This accounts for 27.7% of the variation in private equity investment. Furthermore, employing the VAR model, this study observes a significant positive effect of manufacturing PMI on private equity investment, with significant positive impacts found during the two and six lagged periods. These results align with the leading indicator characteristic of PMI and suggest that private equity investment serves as a “barometer” for the capital market. Additionally, this paper investigates the correlation between manufacturing PMI and different stages of private equity investments (early, venture capital (VC), and PE investments) while also analyzing the correlation between manufacturing PMI and private equity investments from different funding sources, including RMB and foreign currency private equity investments. The results indicate that, akin to private equity investment in general, early, VC, and PE investments exhibit varying degrees of correlation with manufacturing PMI. Moreover, foreign currency private equity investment demonstrates a stronger correlation with manufacturing PMI compared to RMB private equity investment.
Keywords
macroeconomic indicator, private equity investment, correlation
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 3rd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-83558-267-1
- ISBN (Online)
- 978-1-83558-268-8
- Published Date
- 05 January 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/68/20241346
- Copyright
- 05 January 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited