Small Business Economics

, Volume 42, Issue 2, pp 329–338 | Cite as

The international mobility of billionaires

Article

Abstract

This paper uses data from Forbes Magazine’s list of billionaires, supplemented with other publicly available information, to study the migratory behavior of the very rich. Billionaires are more likely to move to countries that share a language and a culture with their country of birth and to countries with larger markets, higher incomes, and lower capital taxes. In total, only 15 % of self-made billionaires—almost all of whom are entrepreneurs—migrated to another country. One explanation for the modest rate of migration may be the country-specificity of entrepreneurs’ human capital. Eight out of ten migrants select a destination country with higher per capita income than that of their birth country, and seven out of ten move to a country with lower capital taxes.

Keywords

Entrepreneurship Migration Taxes 

JEL Classifications

L26 F22 H2 

References

  1. ACCF. (2008). American council for capital formation. Special report.Google Scholar
  2. Acs, Z. (2013). Why philanthropy matters. Princeton, NJ: Princeton University Press.Google Scholar
  3. Adam Smith Institute. (2010). The effect of capital gains tax rises on revenues. December 2011, http://www.adamsmith.org/research/reports/the-effect-of-capital-gains-tax-rises-on-revenues.
  4. Alm, J, & Wallace, S . (2000). Are the rich different? In S. Joel (Ed.), Atlas shrug? The economic consequences of taxing the rich. New York: Russell Sage Foundation.Google Scholar
  5. Bakija, J., & Slemrod, J. (2004). Do the rich flee from high state Taxes? Evidence from federal estate tax returns, NBER Working Paper No. 10645.Google Scholar
  6. Borjas, G., & Bratsberg, B. (1996). Who leaves? The outmigration of the foreign-born. The Review of Economics and Statistics 78, 165–176.CrossRefGoogle Scholar
  7. CEPII. (2010). CEPII Geodesic distances. as at 5 December 2011, http://www.cepii.fr.
  8. Coomes, P., & Hoyt, W. H. (2008). Income taxes and the destination of movers to multistate MSAs. Journal of Urban Economics 63, 920–937.CrossRefGoogle Scholar
  9. Day, K., & Winer, S. (2006). Policy-induced internal migration: An empirical investigation of the canadian case. International Tax and Public Finance 13, 535–564.CrossRefGoogle Scholar
  10. Deloitte. (2011). Deloitte international tax source. as at 5 December 2011, http://www.dits.deloitte.com/.
  11. Fairlie, R., & Woodruff, W. (2010). Mexican-American entrepreneurship. The B.E. Journal of Economic Analysis and Policy, 10. doi:10.2202/1935-1682.2479.
  12. Foley, F. & Kerr, W. (2013). Ethnic innovation and U.S. multinational firm activity. Management Science. doi:10.1287/mnsc.1120.1684.
  13. French, K., & Poterba, J. (1991). Investor diversification and international equity markets. American Economic Review 81, 222–226.Google Scholar
  14. Gaulier, G. & Zignago, S. (2010). BACI: International Trade Database at the Product-level. The 1994-2007 Version. CEPII Working Paper 2010-23.Google Scholar
  15. Goolsbee, A. (2000). What happens when you tax the rich? Evidence from executive compensation. Journal of Political Economy 108, 352–378.CrossRefGoogle Scholar
  16. Gruber, J., & Saez, E. (2002). The elasticity of taxable income: Evidence and implications. Journal of Public Economics 84, 1–32.CrossRefGoogle Scholar
  17. Hart, D., & Acs, Z. (2011). High-tech immigrant entrepreneurship in the United States. Economic Development Quarterly 25, 116–129.CrossRefGoogle Scholar
  18. Hayek, F. A. (1945). The use of knowledge in society. American Economic Review 35, 519–530.Google Scholar
  19. Hines, J. R. Jr. (2010). Treasure Islands. Journal of Economic Perspectives 24, 103–126.CrossRefGoogle Scholar
  20. Hunt, J. (2011). Which immigrants are most innovative and entrepreneurial? Distinctions by entry visa. Journal of Labor Economics 29, 417–457.CrossRefGoogle Scholar
  21. Hunt, J., & Gauthier-Loiselle, M. (2010). How Much Does Immigration Boost Innovation?. American Economic Journal: Macroeconomics, 2, 31–56.Google Scholar
  22. Hunter, R., Oswald, A., & Charlton, B. (2009). The elite brain drain. The Economic Journal 119, 231–251.CrossRefGoogle Scholar
  23. IMF. (2012). World Economic Outlook Database 2012.Google Scholar
  24. Kerr, W. (2008). Ethnic scientific communities and international technology diffusion. Review of Economics and Statistics 90, 518–537.CrossRefGoogle Scholar
  25. Kleven, H., Landais, C., & Saez, E. (2010). Taxation and International Migration of Superstars: Evidence from the European football market. Cambridge, MA: National Bureau of Economic Research, Working Paper #16545Google Scholar
  26. Liebig, T., & Sousa-Poza, A. (2006). The influence of taxes on migration: Evidence from Switzerland. Cambridge Journal of Economics 30, 235–252.CrossRefGoogle Scholar
  27. McFadden, D. (1973). Conditional logit analysis of qualitative choice behavior. In Frontiers of econometrics, ed. P. Zarembka, 105–142. New York: AcademicGoogle Scholar
  28. Michelacci, C., & Silva, O. (2007). Why so many local entrepreneurs? The Review of Economics and Statistics 89, 615–633.CrossRefGoogle Scholar
  29. Murphy, K., Shleifer, A., & Vishny, R. (1991). The allocation of talent: Implications for growth. The Quarterly Journal of Economics 106, 503–530.CrossRefGoogle Scholar
  30. Sanandaji, T. (2010). Self-employment does not measure entrepreneurship, Working Paper.Google Scholar
  31. United Nations. (2006). International migration report 2006: A global assessment. United Nations.Google Scholar
  32. Young C., & Varner, C. (2011). Millionaire migration and state taxation of top incomes: Evidence from a natural experiment. National Tax Journal 64, 255–284.Google Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Harris School of Public PolicyUniversity of ChicagoChicagoUSA
  2. 2.The Research Institute of Industrial EconomicsStockholmSweden

Personalised recommendations