Household Inequality, Entrepreneurial Dynamism, and Corporate Financing

• 成果类型: Article
• 署名作者: Braggion, Fabio; Dwarkasing, Mintra; Ongena, Steven
• 署名单位: Tilburg University; Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC; University of Zurich; Swiss Finance Institute (SFI); KU Leuven; Center for Economic & Policy Research (CEPR)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa097
• 发表日期: 2021
• 页码: 2448
• 关键词: POLITICAL-ECONOMY; UNITED-STATES; GROWTH; WEALTH; income; institutions; consumption; emergence; provision; patterns

摘要

Economic theories posit conflicting hypotheses on how wealth inequality affects entrepreneurial dynamism. We investigate the impact of wealth inequality on business dynamics by constructing local measures of household wealth inequality based on financial rents, home equity, and 1880 farmland. We then identify the effect of wealth inequality on entrepreneurship by instrumenting it with land distribution under the 1862 Homestead Act. Wealth inequality decreases firm entry and exit, and the proportion of high-tech businesses across metropolitan statistical areas. Wealth inequality also lowers the supply of public goods, such as education. Growth in income per capita consequently lags.