Why does the U.S. stock market dominate internationally?

Of the $124 trillion market capitalization of the global stock market, U.S. stocks account for 49% , and international investors own 17% of those.

By comparison, Chinese stocks comprise 13% of global market, and international equity ownership of Chinese stocks is just 3.4% .

The rule of law and the American focus on investing in human capital, especially in science and technology, provided the building blocks for the formation of corporations.

The rule of law and corporate governance structure has played an important role in establishing and maintaining the dominance of the U.S. stock market.

With thoughtful corporate governance reforms, the United States can further enhance the attractiveness of the market, writes Sanjai Bhagat and Siri Terjesen .