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

Author

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  • Schlingemann, Frederik P.
  • Stulz, René M.

Abstract

Publicly traded firms contribute less to total nonfarm employment and GDP now than in the 1970s. Major reasons for this development are the decline of manufacturing, the shift towards more production abroad in 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 earlier. Market capitalizations have not become systematically less informative about firms’ contribution to GDP. Listed stock market superstars account for less employment than they did in the 1970s.

Suggested Citation

  • Schlingemann, Frederik P. & Stulz, René M., 2022. "Have exchange-listed firms become less important for the economy?," Journal of Financial Economics, Elsevier, vol. 143(2), pages 927-958.
    • Handle: RePEc:eee:jfinec:v:143:y:2022:i:2:p:927-958
    DOI: 10.1016/j.jfineco.2021.08.009
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    2. Baxamusa, Mufaddal & Jalal, Abu, 2023. "The decline in stock exchange listed firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 90(C), pages 295-317.

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    More about this item

    Keywords

    Stock market; Value added; Listing; Market capitalization; Employment;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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