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Capitalism economies


Which economies create the most value? 

Published 16 January 2024 in Finance • 5 min read

To make fair comparisons between capitalist economies, it’s important to take non-listed firms into account.

To make fair comparisons between capitalist economies, it’s important to consider how likely companies are to be listed on stock markets. We analyzed the percentages of listed companies by country, year, and size category, discovering significant differences between countries. When we adjusted for these variations, the rankings of nations based on total economic profit changed in meaningful ways. By including the contribution of non-listed firms, the total economic profit in the 21 studied economies increased by an average of 35% from 2014 to 2022, according to the Crux of Capitalism project. However, this adjustment didn’t change the dominant position of the United States in global economic value creation.

In 1606, to finance its shipbuilding and trading expeditions, the Dutch East India Company became the world’s first-ever firm to issue stock. With this Initial Public Offering, the company changed the face of finance forever. Then, as now, the success of publicly listed firms was intimately linked to the success of capitalist societies as a whole. But looking only at listed firms could paint a distorted picture in cross-country comparisons of a nation’s total economic profit potential. After all, Germany, for instance, prides itself on the success of its (often) non-listed Mittelstand and is home to non-listed corporate behemoths, such as Bosch. By contrast, the propensity to list on stock markets seems considerably higher in capital markets affine countries like the United States. Given the Crux of Capitalism project gathers data on publicly listed firms, we investigated how to correct for non-listed firms in this article.

Conceptually, the approach is straightforward: If we had reliable and replicable data on the shares of publicly listed firms by country, year, and asset size category, we could divide our economic profit calculations for listed firms by these shares to obtain an estimate of the value creation of all firms (listed and non-listed) in a country at a point in time. This in turn would allow for ‘fairer’ comparisons of value creation across countries.

Here comes the twist. While there is a lot of literature on why firms list and delist (this has been hotly debated during the last few years especially), a complete dataset of (asset-weighted) shares of listed firms per country, year, and asset size category does not exist. Or at least we could not find one.

We therefore calculated these shares ourselves. For that purpose, we took advantage of the Orbis database, which contains a wealth of information about publicly listed and private companies around the world. Overall, we analyzed data on more than 85,000 companies with assets larger than $10m based in 21 economies.

Four findings followed from these calculations.

First, cross-country variation in the percentage of listed firms is considerable. The average share of listed firms between 2014 and 2022 in the largest asset size category we considered (>$10bn) varies from 35% for China and 97% for Canada. On average, across all the 21 countries we studied, 72% of companies in this asset size category were listed. 28% were not.

Economic profit of public listed firms
The total economic profit generation of all firms (listed and non-listed) in all our 21 economies was about 36% higher on average for the 2014-2022 period than had attention focused solely on listed firms.

Second, these shares change substantially once each firm is weighted by asset size. The percentage of listed firms in the UK, Germany, the Netherlands, and Italy rise by 15.6, 15.4, 14.4, and 12.1 points respectively. The corporate behemoths in these economies tend to have a particularly high probability of being listed. The shares in Indonesia, Malaysia, Australia, and Japan, on the other hand, drop significantly. Overall, the average of 72% across all countries remains unchanged.

Third, the ranking of countries according to their economic profit generation changes. For example, Germany, which is ranked number five if we look only at the economic profits of listed firms, overtakes Japan and secures the number four spot when non-listed firms are considered. Interestingly, this is mostly a consequence of the relatively small shares of German-listed firms in the asset size category $1-10bn. In contrast, there is not much of a difference in the propensity to list for the two countries’ largest corporates (>$10bn of assets). These results nicely confirm the proposition relating to the German Mittelstand expressed at the beginning of this article. Correcting for non-listed firms in no way alters US primacy in global value creation. China remains a very distant second.

Fourth, the total economic profit generation of all firms (listed and non-listed) in all our 21 economies was about 36% higher on average for the 2014-2022 period than had attention focused solely on listed firms. Given that this percentage markup for non-listed list firms remains stable over time, it could be well suited for back-of-the-envelope calculations to scale up the total observed economic profits of publicly listed firms in our 21 countries to the population of all companies in these economies.

Overall, we find that the shares of publicly listed companies differ significantly across countries. When adjusting for these differences, country rankings about firms’ economic profit generation change in ways that are in line with intuition. By and large, however, findings based on analyzing listed firms only remain largely unaffected.


Camilla Erencin

Camilla Erencin

Ph.D. candidate in Economics at the University of St.Gallen

Camilla Erencin is a Ph.D. candidate in Economics at the University of St.Gallen and holds a M.Sc. in economics from the University of Warwick. Her research focuses on corporate performance and competitive strategy under uncertainty.

Simon Evenett

Simon J. Evenett

Professor of International Trade and Economic Development at the University of St. Gallen

Simon J. Evenett is currently a Professor of Economics at the University of St. Gallen and on 1 August 2024 will join the Faculty at IMD. He is also  Co-Chair of the WEF’s Global Council on Trade & Investment and the Founder of the St. Gallen Endowment for Prosperity Through Trade, home of two of the leading independent monitors of how governments shape international business.

Alexander Gruber

Alexander Gruber

Research fellow and lecturer in economics at the University of St.Gallen

Alexander Gruber is a research fellow and a lecturer in economics at the University of St.Gallen. Alexander completed his Ph.D. studies in economics and finance at the University of St.Gallen and at Stanford University. His research focuses on international macroeconomics, banking, and financial stability.

Felix Reitz

Felix Reitz

PhD candidate in international affairs and political economy at the University of St Gallen

Felix Reitz is a PhD candidate in international affairs and political economy at the University of St Gallen, Switzerland, and holds a Master’s in international political economy from the London School of Economics and Political Science. Reitz focuses on fiscal policy, international taxation, and corporate strategy under uncertainty. 


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