RESEARCH AND REPORTS
Esmaeilzadeh Holding AB (publ) employs a scientific approach in every aspect of our business. We have a team of researchers and scientists who regularly conduct in-depth studies in our key areas of operation so that we have better insights and can make more informed decisions supported by their work. Here, you can read more about some of these undertakings.
How Bullshit Affects Private Equity: Acquisitions, Exit and Day-To-Day Work
Johan Gärdebo and Viktor Ström
This whitepaper examines the pervasive issue of “bullshit”—defined as indifference to truth—within the private equity sector. It outlines how bullshit has infiltrated three key stages of private equity: asset acquisition, day-to-day work, and exit. The paper discusses the cultural and technological factors contributing to the spread of bullshit, including the influence of social media and the pressure to conform to societal trends, like policies for diversity, equity, and inclusion (DEI). It also highlights the challenges posed by misinformation, disinformation, and the principal-agent conflicts that arise in the work of private equity. To mitigate these issues, the authors propose solutions such as fostering critical thinking, aligning agent incentives, and employing dual key performance indicators (KPIs) to enhance accountability and transparency in decision-making processes.
Bullshit in Private Equity: What it is and why it is spreading
Johan Gärdebo, Viktor Ström and Rasmus Sjögren
This whitepaper explores the prevalence within private equity and the broader knowledge economy of interesting but unfounded claims, also known as “bullshit”. Bullshit is symptomatic of a culture indifferent to truth. Instead of understanding the world as it is, we settle for influencing how things are perceived. Instead of correctness, we value sincerity. Social tolerance of bullshit, combined with new information technologies, explains why it is now spreading, which has also given rise to parasitic elements within the knowledge economy, also known as “bullshit jobs”. This becomes a problem for private equity that relies on intellectual assets for economic growth but where employees lack incentives to be intellectually explorative.
M&A in the ai era: tackling implementation challenges head-on
Viktor Ström, Ali Mohammadi, Fathane Hasani
In a world where AI is the new frontier, its impact on M&A is both compelling and complex. Promising to revolutionize processes through data analysis, task automation, and performance enhancement, AI nonetheless introduces significant challenges. This study investigates these challenges by integrating insights from AI researchers, tech-savvy M&A professionals, and implementation specialists. Through in-depth interviews with these experts, we illuminate the critical factors influencing successful AI adoption in M&A, aiming to bridge gaps and enhance outcomes in this evolving field.
White paper.
Employee’s Entrepreneurial Human Capital and Firm Performance
Pontus Braunerhjelm, Emma Lappi
A new measure of human capital is introduced, defined as employees’ former involvement in entrepreneurship. Such entrepreneurial human capital (EHC) complements traditional human capital measures accumulated through work experience and education. The previous years of entrepreneurial experience for the population of employees in Swedish private sector firms are tracked using detailed longitudinal register data. The baseline result indicates that a 10% increase in employees being former entrepreneurs increases firm-level productivity by 3.9%. Additionally, evidence shows that heterogeneity in employees’ previous entrepreneurial experience (e.g., the reason for entering and exiting entrepreneurship, type of venture, length of entrepreneurial experiences) influences the impact of EHC on productivity.
Research Policy, 2023
Avaiable at: https://www.sciencedirect.com/science/article/pii/S0048733322002244
Equity Capital FInancing of Swedish SMEs, Innovation, and Decentralized Management
Viktor Ström, Nima Sanandaji, Saeid Esmaeilzadeh, Mouna Esmaeilzadeh
This paper explores Sweden’s strong emphasis on equity capital for SMEs and its connection to being Europe’s top innovative economy. It suggests that Sweden’s high levels of trust in society contribute to the prevalence of private equity financing among SMEs. The study finds that SMEs that rely more on equity financing are associated with higher innovation rankings, especially in product innovation. This correlation is more pronounced in countries with higher levels of trust.
International Journal of Innovation Science, 2023
Link: https://www.emerald.com/insight/content/doi/10.1108/IJIS-10-2022-0200/full/html
Making an M&A Work: Equal Strategic Partnerships Smooth the PatH
Viktor Ström, Pontus Braunerhjelm, Saeid Esmaeilzadeh
This paper aims to enhance our understanding of the determinants underlying successful M&As involving knowledge-intensive, innovative, and entrepreneurial (KIE) firms by equally considering the perspectives of both buyers and sellers. Through a multiple case study based on eight semi-structured interviews with CEOs of both acquiring and acquired firms, the research identifies four key measures that promote entrepreneurial intentions and value creation in M&As: buyer-seller fit, aligned incentives, long-term thinking, and perpetual alliance. This study’s unique approach of balancing the perspectives of buyers and sellers provides a nuanced understanding of the integration challenges in M&As involving KIE firms.
Journal of Business Strategy, 2024
Link: https://www.emerald.com/insight/content/doi/10.1108/JBS-01-2023-0003/full/html
Nordic Innovation Triangle 2023
Nima Sanandaji, Mouna Esmaeilzadeh, Saeid Esmaeilzadeh
The 2023 Nordic Innovation Triangle Index now includes comparisons of SME innovation and growth financing across regions, including the Baltic regions. It shows that Norway is the leading Nordic country in SME innovation, while Swedish SMEs excel in product and business process innovations but lag in collaboration. Finnish and Icelandic SMEs show strong collaboration in innovation, while Danish SMEs focus primarily on business process innovations. Additionally, Baltic SMEs demonstrate unexpected strength in product innovations despite lower overall innovation activity.
Innovation index, 2024
M&A with Decentralized Management in Practice
Viktor Ström, Saeid Esmaeilzadeh
Building on the prior whitepaper Empowering Entrepreneurs through Decentralized Management, this whitepaper focuses on M&A challenges, particularly the principal-agent problem resulting from ownership and control separation. Esmaeilzadeh Holding advocates for The Alliance Strategy, a decentralized management approach that preserves acquired firms’ autonomy while enhancing access to resources. It also discusses how portfolio companies manage M&A complexities, emphasizing key elements like buyer-seller fit, aligned incentives, long-term perspective, and perpetual alliance for decentralized M&A success.
Whitepaper, 2023
Empowering Entrepreneurs through Decentralized Management
Viktor Ström, Saeid Esmaeilzadeh
This whitepaper delves into the extensive literature on acquisition strategies, focusing on two critical aspects: organizational management and the necessity for strategic interdependence. These factors help explain why many acquisitions fall short of expectations while highlighting the determinants that enable some acquisitions to meet or exceed projected outcomes. The exploration is set within the context of entrepreneurship, recognizing entrepreneurs as pivotal in achieving abnormal returns. The paper concludes by connecting this discussion to the strategy at Esmaeilzadeh Holding, providing insights into how superior returns are delivered while minimizing risks.
Whitepaper, 2023
Nordic Innovation Triangle 2022
Nima Sanandaji, Mouna Esmaeilzadeh, Saeid Esmaeilzadeh
The 2022 Nordic Innovation Triangle Index examines successful new companies in the Nordic economic regions, analyzing their types of innovation and business sectors. It identifies Finland as the center of industrial innovation, with Norway excelling in manufacturing, digital, and services. Denmark and Sweden mainly focus on digital innovations, with some regions emphasizing industrial and service innovations. Areas like Sjaelland in Denmark and North Norway serve as mixed innovation hubs with diverse innovation processes.
Innovation index, 2023
The Evolution of the Swedish Market ModeL
Nima Sanandaji, Viktor Ström, Mouna Esmaeilzadeh, Saeid Esmaeilzadeh
This article highlights Sweden’s pioneering role in shaping modern market economies, including the establishment of the first share company, the first European credit notes, and the first central bank. It discusses Anders Chydenius’s early contributions to economic thought, predating Adam Smith’s seminal work. Additionally, it explores Sweden’s unique blend of high taxes, economic freedom, and a culture of trust, which fosters investment, cooperation, and decentralized decision-making in Nordic business management.
Economic Affairs, 2023
Link: https://onlinelibrary.wiley.com/doi/full/10.1111/ecaf.12573
