Publications

Shareholder wealth creation in public equities is strikingly uneven, yet most evidence treats this as a cross-sectional rather than a dynamic phenomenon. This paper asks not which firms create wealth, but when along the corporate life cycle net shareholder wealth is generated. Using a cash-flow-based lifecycle classification and a shareholder-aggregate measure of lifetime excess wealth for U.S. listed firms from 1990 to 2024, we find that Mature firms create $41.6 trillion, or 71.4% of the $58.3 trillion in total excess shareholder wealth, while Growth and Shakeout contribute $9.8 trillion (16.8%) and $7.9 trillion (13.6%), respectively; in contrast, Introduction firms destroy $1.4 trillion (-2.4%) and Decline adds only $0.3 trillion (0.6%). The Mature stage is the only point in the life cycle where the median firm creates positive excess wealth ($10 million), while the median firm in every other stage destroys value. Because life-cycle position is closely tied to financial flexibility, we examine how financing frictions interact with these dynamics and find an extreme concentration of wealth creation: unconstrained Mature firms generate $33.6 trillion, or 57.2% of all excess shareholder wealth, despite representing less than 3% of firm-stage observations; within this group the median unconstrained Mature firm creates $801 million, whereas the most constrained Mature firms create zero. Adding unconstrained Growth and Shakeout firms raises the total contribution of financially flexible mid-life firms to roughly 83% of all excess wealth. Reframing the problem from cross-sectional sorting to intertemporal positioning therefore identifies unconstrained mid-life firms as the primary engine of the equity premium and provides clear guidance for long-horizon asset owners to tilt exposure toward these firms while managing risk at the life-cycle tails.