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Is the Israeli economy controlled by a tiny group of common interest members?

Author

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  • Nissim Ben David

Abstract

Purpose - The purpose of this paper is to illustrate the centralization of control in the Israeli economy. Design/methodology/approach - The paper uses data published by the Israeli stock market authority to identify owners holding more then 5 percent of a company's value. Findings - The total worth of stocks traded in the Tel‐Aviv stock exchange was 690 billion shekels (about 180 billion current US dollars), while the worth of the 25 largest companies was about 479 billion shekels (69.4 percent). The party of interest holdings share in these companies was 35.2 percent (while the public share was 64.8 percent). Practical implications - In order to reach economic efficiency, we are willing to pay the social cost of unequal income distribution. There is no reason not to use the same logic regarding the taxing of inheritance. If it is more economically efficient, inheritance should be taxed, although it has already been taxed in the past. Social implications - How can we improve income distribution without levying taxes that reduce economic efficiency? The answer is high taxes on inheritance. Originality/value - The paper suggests a practical policy to reduce inequality in Israel.

Suggested Citation

  • Nissim Ben David, 2010. "Is the Israeli economy controlled by a tiny group of common interest members?," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(7), pages 537-540, June.
    • Handle: RePEc:eme:ijsepp:v:37:y:2010:i:7:p:537-540
    DOI: 10.1108/03068291011055469
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    References listed on IDEAS

    as
    1. Konstantin Kosenko, 2007. "Evolution of Business Groups in Israel: Their Impact at the Level of the Firm and the Economy," Israel Economic Review, Bank of Israel, vol. 5(2), pages 55-93.
    2. Edward N. Wolff, 1998. "Recent Trends in the Size Distribution of Household Wealth," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 131-150, Summer.
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