Contents

Preface

Acknowledgments

Overview

Tycoonomics: Big Firms, Big Money, and Development

Structure of the Book

A Note on the Approach

IThe Tycoons

1Who Are the Superrich?

How and Why Do People Become Very Rich?

Determinants of Extreme Wealth

Takeaways

2Billionaires, by Region and Sector

Billionaire Data around the Globe

Which Sectors Account for This Growth?

Regional Trends: From East Asia to Africa

Takeaways

IITheir Businesses

3Why Are Large Firms Good for Growth?

Firm Size and Allocation of Resources among Firms

Evidence on Firm Size

Individuals Matter

Flood of New Emerging-Market Mega Firms

Connecting Firms and Individuals

Firms behind Emerging-Market Growth

Takeaways

4Historical Experiences of Development: Large Firms and Extreme Wealth

Big Firms and Big Money during Industrialization

Growth without Large Firms

Big Firms and Big Money in Asia

Contested versus Uncontested Wealth

Big Firms without Wealth Creation

Effects of Wealth on the Economy

Takeaways

5Big Business, Structural Transformation, and Development

Projected Increases in Extreme Wealth in Emerging Markets

Extreme Wealth and Structural Transformation

Self-Made Founders Employ the Most People

Emerging-Market Firms Displace Advanced-Country Firms

Is Extreme Wealth Necessary?

Takeaways

6Globalization and Extreme Wealth

Extreme Wealth and Extreme Talent

Examples of the Role of Globalization in Wealth Creation

Trickle-Down Wealth

Company Exports, Country Trade, and Wealth

Takeaways

IIIDemographic Differences

7A Few Good Women

The Amazing Women of China and the United States

Sectors of Self-Made Women

Why Are There So Few Self-Made Billionaire Women?

Why Is China Different?

Importance of Female Entrepreneurs for Resource Allocation

Women Helping Women

Why Do Women Inherit Less Than Men?

Takeaways

8Young Entrepreneurs, Younger Firms

Emerging-Market Billionaires Are Young

Emerging-Market Companies Are Young

Transition: Get Richer or Get Out

Creative Destruction: Changes in the Billionaires List between 2001 and 2014

Takeaways

IVInequality and Policy Implications

9Inequality, Growth, and Redistribution

Admiration of the Superrich in Emerging Markets

Inequality in the North and South

Takeaways

10Policies for Promoting Innovation and Equity

Creating an Environment that Is Conducive to Growth

Limiting Unproductive but Profitable Activities

Takeaways

References

Index

Tables

1.1

Distribution of number and wealth of billionaires, by source of wealth, 2001 and 2014

2.1

Sector classification

2.2

Distribution of number and wealth of billionaires, by sector, 1996 and 2014

2.3

Countries in each regional group, 1996–2014

2.4

Distribution of billionaires, by source of wealth and region, 2001 and 2014

2.5

Distribution of number and wealth of billionaires, by sector and region, 1996 and 2014

2.6

Sources of wealth of billionaires in BRIC countries, 2001 and 2014

4.1

Industries of the 28 richest individuals in the United States and emerging markets

4.2

Number of top 500 largest firms, by country, 1962, 1993, and 2014

5.1

Emerging-market share of the world’s wealthiest people, 2003, 2013, and 2023

5.2

Employment by emerging-market billionaires, 2014

6.1

Billionaires connected to major Apple suppliers, 2014

6.2

Globalization of largest nonfinancial companies as measured by share of international revenue, by region, 2013

6A.1

List of companies in emerging-market and advanced economies with the richest billionaire owners, by nonfinancial sector, 2014

7.1

Distribution of male and female billionaires and their wealth in advanced countries and emerging markets, 2001 and 2014

7.2

Source of wealth of male and female self-made billionaires in advanced countries and emerging markets, 2014

7.3

Companies founded or cofounded by women who became billionaires, by region, 2014

8.1

Average founding date of billionaire-related companies in advanced countries and emerging economies, 2001 and 2014

8.2

Movement of billionaires across quintiles in advanced countries and emerging economies, 2001–14

8.3

Five-year stability index for top 3, top 5, and top 10 billionaires, by country, 2009–14

9.1

Share of wealth held by top 20 percent of billionaires in advanced countries and emerging economies, 1996–2014

10.1

Sources of wealth of self-made financial-sector billionaires in advanced countries and emerging economies, 2001 and 2014

Figures

O.1

Correlation between density of billionaires and stage of economic development

1.1

Share of self-made billionaires in advanced economies and emerging markets, 2001 and 2014

1.2

Share of self-made wealth among billionaires in advanced economies and emerging markets, 2001 and 2014

1.3

Indices of real net worth of billionaires and energy price, 1996–2014

2.1

Total real net worth of billionaires in advanced economies and emerging markets, 1996–2014

2.2

Total real net worth of billionaires, by region, 1996–2014

2.3

Sources of wealth of Arab billionaires, 2001 and 2014

3.1

Large firms’ contribution to employment and value added in Europe, 2010

3.2

Correlation between GDP growth and large firms’ share of employment in the United States, 1994–2013

3.3

Manufacturing firm size distribution in China (2004) and India (2007)

3.4

Correlation between per capita GDP and share of exports by top 1 percent of exporters, 1995–2014

3.5

Shares of Fortune 500 companies and billionaires in Brazil, Russia, India, and China, 1996–2014

3.6

Correlation between share of billionaires and share of big firms, 2014

4.1

Per capita income in BRICs relative to the United States at similar stages of development

4.2

Growth in China, 1990–2008, versus growth in the United States, 1890–1908

5.1

Average employment per FT Global 500 firm in the BRIC countries, 2009–14

5.2

Correlation between extreme wealth and structural transformation, 1996–2014

5.3

Correlation between extreme wealth and employment by sector in advanced countries and emerging economies, 1996–2014

5.4

Replacement of mega firms from advanced countries by mega firms from emerging markets, by sector, 2006–14

5.5

Stock of outward foreign direct investment by developing and developed economies, 1981–2013

5.6

Correlation between density of ultra-high-net-worth population and stage of development, 2013

6.1

International revenue of Sun Pharmaceutical and the wealth of its founder, 2006–14

6.2

International revenue of CMPC and the wealth of its founder and his family, 2007–13

6.3

Inditex’s domestic and international stores and the wealth of its founder, 1994–2013

6.4

Correlation between exports as share of company’s revenue and billionaire owner’s real net worth, 2004–14

6.5

Correlation between changes in billionaire wealth and changes in international trade in the billionaire’s country, 1996–2014

6.6

Relationship between trade, GDP, and billionaire wealth in advanced countries and emerging economies, 1996–2013

8.1

Distribution of billionaires in advanced countries and emerging economies, by age and source of wealth, 2014

8.2

Distribution of self-made billionaires in advanced countries and emerging economies, by age and industry, 2014

8.3

Age of companies associated with billionaire wealth in advanced countries and emerging economies, 2001 and 2014

8.4

Age of companies associated with billionaire wealth in emerging economies, excluding China and Russia, 2001 and 2014

8.5

Age of companies associated with billionaire founders in advanced countries and emerging economies, by type of sector, 2014

9.1

Increase in wealth of the five richest people in each economy and increase in GDP, advanced countries and emerging economies, 2006–12

9.2

Global income growth incidence curve, 1988–2008

9.3

Income shares of richest Americans, 1996–2012

9.4

Cross-country correlation between billionaire density and share of wealth owned by the top 1 percent, 1998–2002

9.5

Cross-country correlation between billionaire density and share of income earned by the top 1 percent, 1996–2014

9.6

Cross-country correlation between change in billionaire density and change in the share of income earned by the top 1 percent, 1996–2014

9.7

Cross-country correlation between billionaire density and income inequality, 1996–2012

9.8

Inequality in selected emerging economies, 2000s

9.9

Contribution of intensive margin to annual growth of total real net worth of billionaires in advanced countries and emerging economies, 1996 and 2001–14

10.1

Correlation between per capita GDP and estate tax rate, 2013

10.2

Correlation between share of billionaire wealth in advanced countries that is inherited and share of total tax revenue from legacy taxes

Map

6.1

Apple suppliers by home country, 2014