Is the American Public Corporation in Trouble?

40 Pages Posted: 16 Nov 2016 Last revised: 25 Feb 2017

Kathleen M. Kahle

University of Arizona - Department of Finance

René M. Stulz

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

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Date Written: February 1, 2017


We examine the current state of the American public corporation and how it has evolved over the last forty years. There are fewer public corporations now than forty years ago, but they are much older and larger. They invest differently, as the importance of R&D investments has grown relative to capital expenditures. On average, public firms have record high cash holdings and in most recent years they have more cash than long-term debt. They are less profitable than they used to be and profits are more concentrated, as the top 100 firms now account for most of the net income of American public firms. Accounting statements are less informative about the performance and the value of firms because firms increasingly invest in intangible assets that do not appear on their balance sheets. Firms’ total payouts to shareholders as a percent of net income are at record levels, suggesting that firms either lack opportunities to invest or have poor incentives to invest. The credit crisis appears to leave few traces on the course of American public corporations.

Keywords: Public Firm, Delist, IPO, Leverage, Equity Issuance, Repurchases, Cash Flow

JEL Classification: D22, G24, G30

Suggested Citation

Kahle, Kathleen M. and Stulz, René M., Is the American Public Corporation in Trouble? (February 1, 2017). Fisher College of Business Working Paper No. 2016-03-23; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 495/2017; Charles A Dice Center Working No. 2016-23. Available at SSRN: or

Kathleen M. Kahle (Contact Author)

University of Arizona - Department of Finance ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
520-621-7489 (Phone)

Rene M. Stulz

Ohio State University (OSU) - Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States


National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

B-1050 Brussels

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