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Inherited Corporate Control, Inequality and the COVID Crisis

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  • Bordin Bordeerath

Abstract

Measuring inequality by comparing growth of billionaires’ wealth with that of equity markets, I find that inequality grows more rapidly by 23.6 ppt during the COVID crisis and even more in low-income countries where heir billionaires’ wealth surges faster than founder billionaires’ wealth by 18.0 ppt. However, such increase in inequality from heir billionaires can be reduced by strong financial institutions. Overall, this paper provides causal evidence that crises increase inequality and that they give rise particularly to inequality arising from heir billionaires in countries with weak financial institutions. If the rise of heir billionaires implies the increasing value of political connections, this evidence raises the plausibility that crises put low-income countries deeper in the middle-income trap.

Suggested Citation

  • Bordin Bordeerath, 2023. "Inherited Corporate Control, Inequality and the COVID Crisis," PIER Discussion Papers 201, Puey Ungphakorn Institute for Economic Research.
    • Handle: RePEc:pui:dpaper:201
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    References listed on IDEAS

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    More about this item

    Keywords

    Billionaire; Inequality; Middle-Income Trap; COVID Crisis;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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