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

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...

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Bibliographic Details
Published inJournal of financial economics Vol. 143; no. 2; pp. 927 - 958
Main Authors Schlingemann, Frederik P., Stulz, René M.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.02.2022
Elsevier Sequoia S.A
Subjects
Capitalization
Companies
Employment
GDP
Gross Domestic Product
Listing
Manufacturing
Market capitalization
Securities markets
Stock market
Value added
L16
E44
Listing
Employment
Market capitalization
Value added
G32
G23
K22
Stock market
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Summary: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.
ISSN:0304-405X
1879-2774
DOI:10.1016/j.jfineco.2021.08.009