Which economies create the most value? 

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.