High-Net-Worth Individuals, Private Capital and Inequality
With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.
Abstract:
This paper studies the growing importance of high-net-worth individuals (HNWI) in private capital markets, especially venture investments, and its role in explaining increasing inequality. Using novel data sources and differences-in-differences techniques, we find that the US business laws introduced after the global financial crisis—which make it easier for small businesses to raise capital and expand—played a major role in explaining the increasing participation of HNWI in private capital markets, particularly in venture capital. We also document that the companies that raised capital from HNWI did not grow more relative to the rest of companies, but that the increasing participation of HNWI led to higher inequality. Finally, we show that the increasing importance of high-net-worth individuals in private capital markets since the global financial crisis is most important in the US, but that this phenomenon is widespread across the globe.
About Dr. Clara Martínez-Toledano:
Dr. Martínez-Toledano is an Assistant Professor of Financial Economics at Imperial College Business School and Wealth Distribution Coordinator at WID.world. She is also a CEPR and CESifo Research Affiliate and a Research Fellow at the EU Tax Observatory. She was previously a Postdoctoral scholar at Columbia Business School.
Dr. Clara Martínez-Toledano, as an Assistant Professor in Finance at Imperial College Business School, focuses on household and public finance. Her recent work aims to understand the determinants of wealth accumulation and wealth inequality dynamics within and across countries. Before joining Imperial, she was a postdoctoral research scholar at Columbia Business School. Her research interests span areas such as public finance, household finance, macroeconomics, and political economy. Additionally, she serves as the Wealth Distribution Coordinator at the World Inequality Database (WID.world) and is affiliated with the CEPR and CESifo research networks. You can find more information about her work on her research website.
Her recent publications include studies on wealth inequality dynamics in Europe and the United States, as well as an exploration of changing political cleavages in Western democracies. For instance, she co-authored a paper titled “Wealth inequality dynamics in Europe and the United States: understanding the determinants” published in the Journal of Monetary Economics. Another collaborative work titled “Brahmin left versus merchant right: changing political cleavages in 21 Western democracies, 1948-2020” appeared in The Quarterly Journal of Economics. These contributions shed light on important economic and political issues.
Dr. Martínez-Toledano’s academic journey includes a B.A. and M.A. in Economics from Carlos III University and an M.A. and Ph.D. in Economics from the Paris School of Economics.
Language: English
This is a free seminar. Registration is mandatory.
Cold lunches are provided to registered participants.
Supported by the Luxembourg National Research Fund (FNR) 17984041