The Decline of Public Listings in Germany: Stylised Facts, Structural Constraints, and Reform Levers

Germany’s corporate sector is large, innovative, and export-oriented. Yet the country’s listed-company population has been shrinking over an extended period. My paper, ‘The Decline of Public Listings: Causes, Constraints, and Reform Perspectives – The Case of Germany’, addresses a policy-relevant question: why does Germany generate comparatively few new public listings, while losing a meaningful share of its existing listed firms—and what can law and policy realistically change?

The paper brings together stylised facts (to anchor the debate) and a law-and-economics diagnosis of the frictions that shape the ‘go public’ and ‘stay public’ decisions. The objective is to clarify which constraints are plausibly binding—and, in turn, what reforms can (and cannot) achieve.

The paper uses the notion of a ‘listing gap’ as a practical benchmark: the shortfall between the number of listed companies one would expect in an economy of Germany’s size and corporate depth, and the smaller number observed in practice. To make the listing gap tangible, the paper proposes an eligibility-to-listing ratio (ELR). The basic idea is simple: rather than looking at issuer counts in isolation, relate them to an observable proxy for the pool of firms that could plausibly list (for example, firms above an employment threshold). These proxies are necessarily imperfect—eligibility is also a function of governance maturity, reporting readiness, free float, and investor demand—but they help move the discussion from impressionistic comparisons to an interpretable metric.

As a stylised illustration, the paper reports roughly 747 listed domestic firms for 2023, of which 435 are on the Regulated Market. Set against about 61,253 corporations with more than 50 employees, the implied ELR is about 1.22%; broadening the denominator to include non-corporate legal forms (excluding sole proprietorships) with more than 50 employees reduces the ratio to around 0.84%. The point is direction, not precision: the ‘listable’ base has grown while the listed base has trended down.

Stylised facts: weak entries, strong exits

Three patterns motivate the analysis. First, German IPO activity is cyclical but, over the last three decades, follows a downward-sloping trend. Second, exits matter at least as much as entries: for 2016–2023, the Frankfurt Stock Exchange saw 105 new listings versus 191 delistings. Third, contraction is particularly consequential where it affects the Regulated Market, because that segment anchors liquidity and visibility for the wider ecosystem.

Structural and legal frictions behind the decline

The central argument is that the decline reflects an ecosystem equilibrium rather than a single rule failure. Public equity is a two-sided market: issuers, investors, intermediaries, and market infrastructure jointly produce liquidity, research coverage, and valuation. If demand is structurally thin—especially for small and mid-caps—the post-listing environment can entail persistent illiquidity and a valuation discount.

Law matters mainly through fixed costs and uncertainty. Prospectus and market-abuse compliance are essential to investor protection, but their organisational load is largely fixed and therefore disproportionately burdensome for smaller issuers. Fragmentation amplifies that burden: heterogeneous supervisory practice and divergent interpretations of core issuer duties—particularly around inside information and ad-hoc disclosure—raise legal uncertainty and compress the expected net benefit of listing.

A corollary is that issuer-side simplification will not be sufficient unless reforms also improve post-listing market quality. The paper therefore stresses consolidated trading and market-data infrastructure as catalysts, because affordable, high-quality data lowers information costs, supports research, and can widen participation—especially in downstream segments.

Reform perspectives: Listing Act, national reforms, and the SIU agenda

At EU level, the Listing Act package reduces frictions in the prospectus regime (notably for secondary issuances), recalibrates parts of the market-abuse framework, and requires Member States to enable multiple-vote share structures. At national level, Germany’s Zukunftsfinanzierungsgesetz (ZuFinG) is an omnibus reform spanning corporate and capital-market law, including streamlined capital increases and the reintroduction of multiple-vote share structures. Building on ZuFinG, the Standortfördergesetz (StoFöG) seeks to mobilise private capital, including via roll-over relief for gains reinvested in equity stakes and a reduction of the minimum nominal value per share.

Most importantly for the ecosystem thesis, the Commission’s Savings and Investment Union (SIU) agenda shifts the focus from rule-specific adjustments towards system-level integration and demand-side deepening. The core logic is to strengthen channels from household savings into long-term market investment, to broaden the investor base, and to improve the liquidity environment in which issuers operate. This demand-side dimension is not an optional add-on: it is central to any strategy that aims to stabilise and expand the listed-company population, especially beyond the largest names.

Conclusion

Germany’s listing gap is not a single-issue problem. It reflects intertwined forces: a post-listing environment too thin to sustain breadth beyond the top tier, fixed regulatory costs and fragmented supervisory practice that weigh on smaller issuers, and private-market outside options that have become more attractive. Durable progress therefore requires moving market quality, governance flexibility, and demand strength in tandem.

The author’s article can be accessed here.

Alexander Sajnovits is Associate Professor equivalent (Privatdozent) at the University of Mainz, Germany, and acting chair (Professurvertreter) at the University of Heidelberg, Germany.