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Capital Markets · European Equity Markets · Market Capitalization · US Listings
The European Central Bank's Financial Integration and Structure in the Euro Area 2024 report reveals US stock markets significantly outpaced European exchanges in attracting new company listings since 2019, with US companies achieving 3.3 times higher average market capitalization than EU companies in 2022.
The report, prepared by Zakaria Gati, Claudia Lambert, Davide Ranucci, Clément Rouveyrol, and Hanni Schölermann, highlights a surge in US-listed companies, particularly foreign firms, while European listings remain below pre-global financial crisis levels. Despite high-profile delistings like Flutter Entertainment and Linde from EU exchanges, the overall evidence does not support a widespread delisting trend, as delistings averaged only 4.8% of market capitalization at Euronext between 2019-22, primarily driven by mergers and acquisitions, not privatization or regulatory burden.
US markets offer greater attractiveness for large European firms due to higher market depth, a broader investor base, and favorable listing standards for foreign issuers, including reduced compliance costs via foreign private issuer status. This has led to a steady increase in EU-domiciled companies dual-listed in both the EU and US, which were six times more numerous and 18.8 times larger in aggregated market capitalization than EU firms listed solely in the US in 2022.
The ECB warns that a widening listing gap will exacerbate existing differences in market depth and liquidity, hindering growth opportunities for EU capital markets. EU policy, including the 2022 EU Listing Act, aims to reduce regulatory costs for smaller companies, though the report suggests size and profitability are more critical listing factors.
