Have exchange-listed firms become less important for the economy?

66 Pages Posted: 7 Oct 2020 Last revised: 22 Feb 2021

See all articles by Frederik P. Schlingemann

Frederik P. Schlingemann

University of Pittsburgh - Finance Group; European Corporate Governance Institute (ECGI)

René M. Stulz

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: January 26, 2021

Abstract

The firms listed on the stock market in aggregate contribute less to total non-farm employment and GDP now than in the 1970s. A major reason for this development is the decline of manufacturing and the growth of the service economy as firms providing services are less likely to be listed on exchanges. A firm’s stock market capitalization is much less instructive about its employment now than in earlier years. Listed stock market superstars account for less employment than they did in the 1970s. Market capitalizations have not become systematically less informative about firms’ contribution to GDP.

Keywords: Stock market, value added, listing, market capitalization, employment

JEL Classification: G23, G32, E44, K22, L16

Suggested Citation

Schlingemann, Frederik Paul and Stulz, Rene M., Have exchange-listed firms become less important for the economy? (January 26, 2021). Fisher College of Business Working Paper No. 2020-03-22, Charles A. Dice Center Working Paper No. 2020-22, European Corporate Governance Institute – Finance Working Paper 731/2021, Available at SSRN: https://ssrn.com/abstract=3706131 or http://dx.doi.org/10.2139/ssrn.3706131

Frederik Paul Schlingemann

University of Pittsburgh - Finance Group ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Rene M. Stulz (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )

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HOME PAGE: http://www.cob.ohio-state.edu/fin/faculty/stulz

National Bureau of Economic Research (NBER)

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European Corporate Governance Institute (ECGI)

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