Fact Check: Between 1996 and 2020, the number of publicly held corporations shrank by nearly half.

Fact Check: "Between 1996 and 2020, the number of publicly held corporations shrank by nearly half."

What We Know

The claim that the number of publicly held corporations in the U.S. shrank by nearly half between 1996 and 2020 is supported by substantial data. According to research, the number of public firms in the U.S. decreased from over 7,000 in 1996 to less than 4,000 by 2020, indicating a decline of approximately 43% to 50% during this period (Tuck School of Business). This trend is corroborated by various sources, including the Federal Reserve, which noted that the number of publicly traded firms peaked in 1997 at 7,842 and has since steadily declined (Federal Reserve Board).

Additionally, a report from McKinsey highlights that the number of publicly traded companies has decreased significantly over the past few decades, with a notable drop of 2.2% annually between 2010 and 2020 (McKinsey). Other analyses have also indicated a similar trend, confirming that the decline in public companies is a persistent issue (IE Insights, Blue Trust).

Analysis

The evidence supporting the claim is robust, with multiple credible sources confirming the significant decline in the number of publicly held corporations in the U.S. from 1996 to 2020. The data from the Tuck School of Business provides a clear numerical breakdown, showing a decrease from over 7,000 to under 4,000 public firms (Tuck School of Business). This aligns with findings from the Federal Reserve, which tracked the peak and subsequent decline of public companies over the years (Federal Reserve Board).

While some sources, such as McKinsey, argue that the narrative surrounding the decline may be exaggerated, they still acknowledge the downward trend in public listings (McKinsey). The analysis from various institutions indicates that the decline is not merely a statistical anomaly but reflects broader economic trends, including changes in how companies choose to raise capital and the increasing prevalence of mergers and acquisitions.

The reliability of these sources is high, as they come from reputable academic and financial institutions. The Tuck School of Business and the Federal Reserve are both recognized authorities in their respective fields, providing a strong foundation for the claim's validity.

Conclusion

Verdict: True
The claim that the number of publicly held corporations in the U.S. shrank by nearly half between 1996 and 2020 is substantiated by credible data and analyses. The decline from over 7,000 to less than 4,000 public firms is consistent across multiple reputable sources, indicating a significant and concerning trend in the landscape of U.S. public companies.

Fact Check: Between 1996 and 2020, the number of publicly held corporations shrank by nearly half.