Inherited Corporate Control and Inequality: Evidence from the COVID Crisis

This paper examines wealth inequality during the COVID crisis. Measuring inequality by comparing growth of billionaires' wealth with that of equity markets, I find that the COVID crisis causes inequality to grow more rapidly by 23.6 ppt and even more in low-income countries where heir billionaires' wealth surges faster than founder billionaires’ wealth by 18.0 ppt. Moreover, such increase in inequality from heir billionaires is higher in countries with weaker financial institutions. If heir billionaires are more adept at rent seeking than founder billionaires because family connections can be inherited more reliably than entrepreneurial talent, this paper raises the plausibility that crises give rise to rent seekers when financial institutions are weak.