Stock market dynamism describes how frequently new firms break into the ranks of a country's largest publicly listed companies.

We measure stock market dynamism by tracking, for each country and quarter, the largest four firms (as measured by market capitalisation), and then totalling the number of new firms that have entered the top four since 2000.

Low stock market dynamism indicates less competition, because where a country's largest publicly listed companies remain unchanged, it suggests that the largest firms may not need to compete to keep or win customers.

However, stock market dynamism is only capturing the very largest firms, and only those that are listed on a stock exchange. Some growing Australian companies may list on other stock exchanges, so this may underestimate churn in Australia's largest firms.

Stock market dynamism may be low where one or two industries account for all of the largest firms, and there is high persistence in these industries, even where competition is strong across the rest of the economy.