I have a panel dataset with 13 countries and 10 years (1999-2009).

I'm trying to calculate share/percentage of the average firm market capitalization to average stock market capitalization for each country within the 10 year period.

My numbers does not makes sense, and besides US, all of them are way above 100%.

I cross-checked with my data, and I see that some individual firms have a reported value of market capitalization that exceeds total stock market capitalization for a given year.

I deleted all company ID duplicates so the same firm does not occur in the country sample twice.

My question;
Is it really possible that the firm market capitalization can exceed stock market capitalization for a given year, if so, what is the theory?

As you may discover, this is not my field at all, but I am trying to figure out the extent or significance of my sample size to the stock market/ or the national economy in general (for each country).

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    Is this problem related to the fact a company listed on multiple exchanges like Rio Tinto, is worth its NYSE market cap + its LSE market cap + its ASX market cap + preference shares & even convertible hybrid bonds et al.? – ethug May 1 '16 at 7:19

This depends. Quite a few stock exchanges / country report total capitalisation in terms of free float. I.E total shares that can be traded, ignoring the promoters shares.

The market cap reported by company takes all shares.

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  • thanks for your reply. So what you are saying is that standard Stock Market Capitalization data from World Bank etc. is not the value of all listed company for a given year? – rca Feb 1 '16 at 18:29

Market cap is speculative value, M = P * W, where W is stock (or other way of owning) percentage of ownership, P - price of percentage of ownership. This could include "outside of exchange" deals. Some funds could buy ownership percentage directly via partial ownership deal. That ownership is not stock, but fixed-type which has value too.

Stock market cap is speculative value, M2 = Q * D, where D is free stocks available freely, Q - price of stock, in other words Quote number (not price of ownership).

Many stock types do NOT provide actual percentage of ownership, being just another type of bond with non-fixed coupon and non-fixed price. Though such stocks do not add to company's capitalization after sold to markets, it adds to market capitalization at the moment of selling via initial price.

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