Economist to investigate leaders' influence on rising inequality

Over the past four decades, income inequality has increased in many industrialised countries. For example, the share of total income held by the richest one percent of the population has increased while labour's share of national income has decreased.

The literature has primarily attributed this trend to factors such as international trade, technological advances and automation.

In the project ‘Shaping the Corporate Management Culture’, an international group of researchers will investigate to what extent and how management philosophy and values among top executives may be a contributing factor to the observed increase in inequality.

‘This is not only of historical importance, but is perhaps more important than ever due to the proliferation of artificial intelligence, which has the potential to deliver major productivity improvements and fundamentally change the labour market,’ points out Daniel le Maire, Associate Professor at the Department of Economics, who is leading the project.

Contributing to a larger agenda

The research project, which Independent Research Fund Denmark has chosen to support with DKK 6.1 million, uses a combination of administrative register data and survey data from Denmark to empirically investigate how management philosophy spreads and what impact it has on the distribution of profits between shareholders and workers.

‘In addition, we focus specifically on the role of business administration programmes in changing personal values and visions. Our project contributes to a larger research agenda that examines the role of key actors and norms in the development of the labour market,’ explains Daniel le Maire.

The other researchers behind the project are Alex Xi He (University of Maryland, Smith School of Business), Daron Acemoglu (MIT, Economics Department), Sydnee Caldwell (UC Berkeley, Haas School of Business) and Moira Daly (Copenhagen Business School).