Who we are, What we do, and Why:
We are a group of economists under the leadership of Professor Simon J. Evenett keen on learning just how well firms and capitalisms are really performing around the world. So much is expected of business these days – but few stop to ask how many resources firms can really mobilise. Does capitalism have sufficient vim to solve societal problems, in particular during these disrupted times? If capital has been fundamentally mispriced over the past decade or so, then has that distorted assessments of corporate performance? Questions such as these became more pressing as central banks raised interest rates.
Through this initiative we make available reliable measures of economic value creation by firms and of corporate distress as well as a suite of empirical insights that build upon this dataset. The product of our work, Crux of Capitalism (CoC), is a non-profit initiative where various user communities can access unbiased and frequently updated corporate performance data.
How much should business spend on solving societal challenges like the transition to a low-carbon economy? A prior question – that few ask – is how much money business can spend tackling societal challenges? That depends on the economic profits that firms make – a calculation that can depart from regularly reported accounting profit calculations. Remarkably, despite decades of interest in Economic Value-Added measures of corporate performance, little reliable cross-country, within country, and within-sector information is available on how much value business actually creates. Put simply, we need reliable measures of the vitality of national and global capitalism. CoC will plug this gap by providing high-quality and high frequency data on key measures of corporate performance.
Our goal is to shed light on two inextricably linked aspects of corporate health – economic value creation and corporate distress. For the first time, we combine accounting and market data to systematically measure the profitability of publicly listed firms across sectors and countries that will allow conclusions to be drawn about the health of capitalism. By deploying data going back decades, we further show how major external events – such as the Global Financial Crisis and the onset of the COVID-19 pandemic – affected the ability of companies to create economic profits. In doing so, we uncover telling facts, reveal interesting patterns, and facilitate sensible evidence-driven comparisons that will inform the assessments and decisions by analysts, business strategists, civil society, journalists, policymakers, and other interested stakeholders. Moreover, in this initiative we will provide valuable data that can be used by others – as well as generating our own insights into the true performance of capitalisms around the world.
The buck stops here
Data Analyst & Content Manager
Infrastructure & Design Lead
Bodanstrasse 8 CH-9000 St.Gallen