There is a lot of talk about the importance of attracting large companies to Portugal – because they pay better wages, innovate more, are more productive and have a positive multiplier effect on the rest of the economy. Portugal is not a country of large companies and the large companies that exist in our country are small in size when compared to large companies in other Western European countries.
Let’s see what the numbers say. The average capitalization of the ten largest Portuguese companies listed on the stock exchange was €6 billion in October 2024, surpassing only, in Western Europe, Greece (€5 billion) and Iceland (€ billion).
In France, the ten largest companies listed on the stock exchange have an average capitalization of €157 billion, a figure around 26 times higher than what is found in Portugal.
The size of the country will have some influence on the size of the companies, but Ireland and Denmark have around half the Portuguese population and their ten largest companies are worth, on average, €75 billion and €68 billion respectively, much more than in Portugal . On the other hand, in Italy, despite being one of the most populous countries in Western Europe, the average capitalization of the 10 largest companies is almost 40% smaller than that of the 10 largest French companies.
In other words, the previous paragraph demonstrates that the size of countries helps to boost company growth, thanks to the existence of a larger domestic market, but it does not seem to be the crucial factor. As such, the size of our country, despite being much smaller than Germany, France or the United Kingdom, for example, is not an impediment to us being able to have more and larger large companies nor should it compromise Portugal’s ambition to be more competitive among the large players global business.
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