Is the Public Corporation Really in Eclipse? Evidence from the Asia-Pacific

While the US has experienced a 50% decline in the number of publicly listed corporations since the late 1990s, there has been an 800% increase in the Asia-Pacific region. Notwithstanding these divergent paths, there are strikingly similar patterns in both regions in the evolution of corporate financial policies. Asia-Pacific firms invest more in R&D and less in capital expenditures, as do US firms. They have higher cash holdings as a fraction of total assets. Dividends as a fraction of income are lower, the ranks of dividend-paying firms in the Asia-Pacific are declining, and, as in the US, share repurchase activity has grown. Concentration ratios of assets, income, cash, and dividends among US firms have risen to the already high levels seen in Asia-Pacific markets. Changes in corporate financial policies that appear to reveal poorer incentives to invest cannot explain the dramatically different shifts in the landscape for public companies in the US and the Asia-Pacific region.