Professor René Stulz, The Ohio State University
Relative to other countries, the US now has abnormally few listed firms given its level of economic development and the quality of its institutions. We call this the “US listing gap” and show that it is consistent with a decrease in the net benefit of a listing for US firms. We find that the propensity to be listed is lower than at the listing peak in 1996 for all firm size categories and industries. From 1997 to the end of our sample period in 2012, the new list rate is low and the delist rate is high compared to US history and to other countries. The high delist rate accounts for roughly 46 per cent of the listing gap and the low new list rate for 54 per cent. The high delist rate is explained by an unusually high rate of acquisitions of publicly-listed firms compared to previous US history and to other countries. We rule out alternative explanations for the listing gap, including industry changes, changes in listing requirements, and the reforms of the early 2000s.