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11. IN3 - Incubating a New Spain through the Promotion of Entrepreneurship

Author:
James Costos
Publication Date:
09-2015
Content Type:
Journal Article
Journal:
The Ambassador's Review
Abstract:
Helping entrepreneurs grow their businesses and achieve their full potential is in the interest of anyone who wants to foster prosperity worldwide— that’s why it’s an Obama administration priority. Growth anywhere does some good everywhere, and the fact is that entrepreneurs create jobs and drive economic growth both at home and abroad. In the United States, 40 percent of our $17 trillion economy is generated by companies that did not even exist 20 years ago. Two-thirds of our 65 months of consecutive job growth is driven by small businesses. The owners of those businesses—28 million and growing—employ over half of America’s workforce.
Topic:
Economics, Human Welfare, Social Stratification, and Labor Issues
Political Geography:
United States and Spain

12. The Enduring Importance of Family Wealth: Evidence from the Forbes 400, 1982 to 2013

Author:
Philip Korom, Mark Lutter, and Jens Beckert
Publication Date:
12-2015
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
The social science literature proposes two competing explanatory frameworks for the existence and longevity of super-fortunes: superstar or winner-take-all mechanisms, suggesting an increased dominance of new self-made billionaires; and mechanisms focusing on inherited advantages, suggesting an enduring importance of old family fortunes. Using panel data from the USA’s annual Forbes 400 ranking (1982–2013), this study analyzes factors that increase or decrease the likelihood of remaining listed among the American super-rich. We find initially that the percentages of self-made entrepreneurs among the highest wealth echelons of US society have increased significantly since 1982. Sectors that improved the most are finance (including hedge funds and private equity), new technology and mass retail. The decline of inheritance as a source of wealth and the rise of new tech and finance fortunes suggest low reproduction rates among superrich property owners. Family wealth, however, plays an important role if the longevity of fortunes is considered. While the literature predicts family fortunes to be taxed away, divided among a large number of heirs, or lost through incompetence, we find that scions of inherited great wealth (mostly up to the third generation) are more likely to remain listed in the Forbes 400 roster than self-made entrepreneurs. We conclude that even though entrepreneurship increasingly matters for becoming super-rich, it is first and foremost the ability of rich family dynasties to retain control over corporations and to access sophisticated financial advice that makes fortunes last.
Topic:
Economics, Science and Technology, Social Stratification, and Landpower
Political Geography:
United States of America