Companies bought by private equity firms do not destroy jobs on a large scale, according to research for the World Economic Forum.

The research found that private equity tends to stay invested for five years and create more new jobs.

The research, conducted by Josh Lerner of Harvard Business School, found that in the two years before being taken private, companies tend to lose 4% more jobs than their peers - an indication that these firms are in serious trouble to start with.

In the two years after the takeover, these companies cut 7% more jobs than rivals. After that, employment levels are comparable.

However, the sharper job cuts are partially offset by the fact that private equity-owned firms are growing faster and create 6% more jobs at new factories than their rivals.

More importantly though, these figures do not take account of the jobs saved because private equity-controlled firms are less likely to go bankrupt.

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