Working Paper: NBER ID: w27942
Authors: Frederik P. Schlingemann; Ren M. Stulz
Abstract: The firms listed on the stock market in aggregate contribute less to total non-farm employment and GDP now than in the 1970s. A major reason for this development is the decline of 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 in earlier years. Listed stock market superstars account for less employment than they did in the 1970s. Market capitalizations have not become systematically less informative about firms’ contribution to GDP.
Keywords: No keywords provided
JEL Codes: E44; G23; G32; K22; L16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| market capitalization (G10) | GDP (E20) |
| market capitalization (G10) | employment (J68) |
| decline of manufacturing (O14) | market capitalization (G10) |
| growth of service economy (O14) | market capitalization (G10) |
| type of firms listed (G24) | economic contributions (F69) |
| industry composition changes (L16) | economic importance of listed firms (G32) |
| market capitalization (G10) | employment unrepresentativeness (J79) |