Inherited Wealth, Corporate Control and Economic Growth

摘要: Countries in which billionaire heirs' wealth is large relative to G.D.P. grow more slowly; show signs of political rent seeking, and spend less on innovation than do other countries at similar levels development. In contrast, self-made entrepreneur rapidly fewer seeking. We argue that this consistent with wealthy entrenched families having objectives creating public shareholder value. Also, the control pyramids through they are give preferential access capital enhanced lobbying power. These also have vested interests preserving value existing capital. To investigate these arguments, we explore firm-level Canadian data. Heir-controlled firms low industry adjusted financial performance, labor ratios, R&D spending same ages sizes. concentrated, inherited corporate impedes growth, dub "the disease". Further research needed determine international incidence condition. Finally, heir-controlled firms' share prices fell those comparable news Canada-U.S. free trade agreement would be ratified. A key provision treaty market openness. Under treaty, ratios rose, while heir-control fell. suggest openness, especially markets, may mitigate ill effects concentrated control. If so, openness matters for reasons not captured by standard finance models.