A trawl through 30 years of data traces the evolution of superstar firms, a difficult-to-tame species

The world’s biggest businesses were doing fine until Covid-19 arrived. Now they’re doing even better.

- Cristina Lindblad

The top 50 companies by value-added $4.5 trillion of stock market capitalization in 2020, taking their combined worth to about 28% of global gross domestic product. Three decades ago the equivalent figure was less than 5%.

That’s just one measure of how superstar firms have come to dominate the world economy, according to a new study by Bloomberg Economics that maps out their changing role. The findings provide ammunition for policymakers bent on reining in the giants—including a U.S. government that’s seeking to rally global support for higher levies on corporate profits.

The biggest companies generally post fatter margins and pay less in taxes than they did in decades past, the Bloomberg Economics study shows. Their median effective tax rate of 35% in 1990 had dwindled to only 17% last year—while profit margins headed in the opposite direction, soaring from 7% to 18% over the same period. They also devote a smaller portion of their earnings to job-creating investments: In 1990, IBM— at the time the world’s biggest publicly listed company—devoted 9% of its revenue to capital expenditures. Fast-forward to 2020, when Apple— its replacement in the top spot—spent just 3%.