Have Exchange-Listed Firms Become Less Important for the Economy?

60 Pages Posted: 14 Oct 2020 Last revised: 19 Nov 2021

See all articles by Frederik P. Schlingemann

Frederik P. Schlingemann

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

René Stulz

Ohio State University (OSU) - Fisher College of Business

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Date Written: October 2020

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.

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Suggested Citation

Schlingemann, Frederik Paul and Stulz, René, Have Exchange-Listed Firms Become Less Important for the Economy? (October 2020). Available at SSRN: https://ssrn.com/abstract=3709633

Frederik Paul Schlingemann (Contact Author)

University of Pittsburgh - Finance Group ( email )

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European Corporate Governance Institute (ECGI) ( email )

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René Stulz

Ohio State University (OSU) - Fisher College of Business ( email )

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United States

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