The Increasing Number of Listed Firms in Sweden and the Changing Nature of the Public Market

Sammanfattning: There is a global trend of decreasing number of publicly traded firms on stock markets affecting the nature of industries, firm performance, and investor returns. Concerns have been raised regarding this development. Though, the stock market in Sweden has during the last decades experienced the opposite development with an increasing number of publicly traded firms. This paper examines how the number of publicly traded firms on the Stockholm Stock Exchange has changed over time and what the effects are on company performance and returns to investors. We study all listed firms on Large-, Mid-, and Small-cap during the period 1997-2018. Our study concludes that the number of publicly traded firms has increased over time and the market concentration has decreased. Furthermore, our study show that an increased number of publicly traded firms is associated with lower firm profitability and worse firm performance.