Eclipse of the Public Corporation or Eclipse of the Public Markets? / Craig Doidge, Kathleen M. Kahle, G. Andrew Karolyi, René M. Stulz.

Format:

Book

Author/Creator:

Doidge, Craig.

Contributor:

National Bureau of Economic Research.

Kahle, Kathleen M.

Karolyi, G. Andrew.

Stulz, René M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24265.

NBER working paper series no. w24265

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

Since reaching a peak in 1997, the number of listed firms in the U.S. has fallen in every year but one. During this same period, public firms have been net purchasers of $3.6 trillion of equity (in 2015 dollars) rather than net issuers. The propensity to be listed is lower across all firm size groups, but more so among firms with less than 5,000 employees. Relative to other countries, the U.S. now has abnormally few listed firms. Because markets have become unattractive to small firms, existing listed firms are larger and older. We argue that the importance of intangible investment has grown but that public markets are not well-suited for young, R&D-intensive companies. Since there is abundant capital available to such firms without going public, they have little incentive to do so until they reach the point in their lifecycle where they focus more on payouts than on raising capital.

Notes:

Print version record

January 2018.