Ages of the World's Largest Companies
Brian Gongol


Hypothesis: Regulation of an economy favors big businesses over small ones, because big businesses have the resources to influence lawmakers and regulators (through lobbying and other efforts) as well as the wherewithal to manage complex regulations with attorneys and accountants; whereas small businesses would tend to suffer more from regulations since they lack the same resources.

Method: If the hypothesis is true, then the largest companies in heavily-regulated economies should tend to be older than the largest companies in less-regulated environments. The ten largest companies in each of the following countries were chosen from the Forbes Global 2000: US, UK, EU, Japan, Australia, and Canada. The UK was kept separate from the rest of the EU because it has a distinctly different legal history than the continent.

Data:
Forbes Rank Company Year Founded
1 Citigroup 1812
2 GE 1890
3 AIG 1967
4 Bank of America 1902
6 ExxonMobil 1882
12 Wal-Mart 1962
14 JP Morgan Chase 1799
15 Berkshire Hathaway 1956
17 IBM 1911
18 Verizon 1883
Average age of American companies
109.6

5 HSBC 1865
7 Royal Dutch/Shell 1892
8 BP 1901
13 Royal Bank of Scotland 1727
21 Barclays 1736
32 HBOS 1695
48 Lloyds TSB 1765
70 GlaxoSmithKline 1830
77 Aviva 1696
112 BT Group 1846
Average age of British companies
210.7

9 ING 1845
11 UBS 1897
16 BNP Paribas 1848
18 Total 1924
26 AXA 1720
28 Credit Suisse 1856
30 ENI 1926
33 DaimlerChrysler 1886
34 E.ON 1923
35 Allianz 1889
Average age of EU-member companies
134.6

10 Toyota 1918
23 Nippon Tel 1952
41 Mizuho Financial 1864
52 Mitsubishi Tokyo Financial 1948
55 Honda 1946
56 Sumitomo Mitsui 1691
58 Nissan 1933
90 Tokyo Electric 1951
123 Sony 1946
140 Canon 1937
Average age of Japanese companies
97.4

91 National Australia Bank 1858
139 Commonwealth Bank Group 1911
141 ANZ Banking 1835
154 Westpac Banking Group 1861
180 Telstra 1901
441 AMP 1854
519 St. George Bank 1848
596 Coles Myer 1900
631 Woolworths 1924
632 Suncorp-Metway 1916
Average age of Australian companies
125.2

89 Royal Bank of Canada 1864
117 Manulife Financial 1887
129 Bank of Nova Scotia 1832
143 Toronto-Dominion Bank 1855
157 Canadian Imperial Bank 1867
159 Sun Life Financial 1865
171 Bank of Montreal 1817
206 BCE 1879
228 EnCana 1958
271 Power Corp of Canada 1925
Average age of Canadian companies
131.1


Summary Table:

Japan 97.4
US 109.6
Australia 125.2
Canada 131.1
EU 134.6
UK 210.7


Discussion: While not conclusive (true regression analysis would really need to be performed in this case, with larger data sets for each country), the data appear to support the hypothesis. The average age of Japanese companies appears to reflect the significance of the considerable destruction in Japan during WWII, as well as the influence of the post-war American administration. Though Canada and Australia are both essentially the same age as the United States and share virtually identical legal traditions, their large companies are on average 15 to 20 years older than large companies in the US. Since the US is generally thought to have had one of the world's least-regulated economies over the last century, its largest companies should tend to be significantly younger than those in more heavily-regulated countries.