The NYT has a fascinating column showing the 20 corporations with the greatest market equity in 1989, 1999, and 2007. The list is fascinating for two reasons. First, there is a surprising amount of turnover: Only four of the top twenty in 1989 were still there in 2007. The other striking feature is the extent to which this list is driven by market bubbles. Fourteen of the top twenty, including the top four, were Japanese companies in 1989. Not one of these companies was still listed in the top twenty in 2007. There was a similar story in 1999 when fourteen of the top twenty, including six of the top seven, corporations were located in the United States. Only five of these fourteen still appeared in the top twenty in 2007. The big star at the moment is China, with eight of the top twenty and three of the five most valuable corporations. One could reasonably speculate that there is a bubble at work here, although over a longer time Chinese firms can be expected to increasingly dominate this list.
--Dean Baker
