Business History Review

Scholars have recommended taking a closer look at firms that raise funds from the financial system as a way of understanding the relation between finance and growth. This article explores the role of the U.S. financial system in providing funds to two prominent American firms, General Electric and Westinghouse Electric, over the course of the last century. The financial system's support was important for both companies, but there were important differences, as well as changes over time, in their patterns of financial dependence and autonomy. Two factors—investments in working capital and dividend policies—are important for explaining the financing patterns of both firms, suggesting clear hypotheses about the determinants of demand for corporate finance that can be tested in further financial histories. The findings also highlight the importance of looking at working, as well as fixed, capital in studies of enterprises' relations with the financial system, and of examining the money that flows out of companies as well as the funds that flow into them.

The Dutch company Philips succeeded in producing transistors early on. By the early 1950s it had acquired a strong position in the European semiconductor market. However, by the end of the 1950s, it was being surpassed by competitors. In response to the developments in solid state electronics, Philips' management adjusted the company's research, development, and production capabilities, enabling the firm to bring point-contact and layer transistors onto the market and to develop its own high-frequency transistor. When demand for industrial transistors increased, Philips was unprepared, leaving it without an entrée to this new market. The company's exclusive contracts with IBM not only failed to produce the expected results; they also limited its ability to establish ties with other computer companies and, most important, it illustrated Philips' choice not to produce computers. Therefore, Philips did not build knowledge and expertise in the computer field. Philips' organizational structure hampered both its innovative capacity in the field of applications and its ability to adjust transistor requirements to suit customer needs. Thus, by the early 1960s, Philips found itself in a weakened position in the increasingly competitive transistor market.

The Kirin Brewery Company is a large, long-established, and successful firm in a traditional, "old economy" sector in Japan. Nevertheless, in the early 1980s it entered the "new economy" business of biopharmaceuticals, based on advances in scientific techniques at the time and prospects for the biotechnology industry in the future. This essay explains why Kirin entered this field and how it developed the necessary competences. The development of these new competences was in no small part owing to entrepreneurial alertness and opportunity recognition by individuals in various functions of the firm. As such, the case illustrates the presence in the large modern corporation of the individual entrepreneur, a figure whose existence and role is often downplayed or simply omitted in nominalist treatments of entrepreneurship, which depict innovation as a somewhat mechanistic endeavor, absent any element of entrepreneurial behavior.

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Irresistible Empire: America's Advance through Twentieth-Century Europe. By Victoria De Grazia. Reviewed by Michael French.

Auto Pact: Creating a Borderless North American Auto Industry. By Dimitry Anastakis. Reviewed by Barry E. C. Boothman.

Specters of the Atlantic: Finance Capital, Slavery, and the Philosophy of History. By Ian Baucom. Reviewed by W. Fitzhugh Brundage.

The Atlantic Economy during the Seventeenth and Eighteenth Centuries: Organization, Operation, Practice, and Personnel. Edited by Peter A. Coclanis. Reviewed by Michelle Craig McDonald.

The Digital Hand, Volume 2: How Computers Changed the Work of American Financial, Telecommunications, Media, and Entertainment Industries. By James W. Cortada. Reviewed by Atsushi Akera.

Turning Houses into Homes: A History of the Retailing and Consumption of Domestic Furnishings. By Clive Edwards. Reviewed by Erika Rappaport.

Feeding the World: An Economic History of Agriculture, 1800-2000. By Giovanni Federico. Reviewed by Andrew Duffin.

Capitalism, Social Privilege and Managerial Ideologies. By Ernesto R. Gantman. Reviewed by Daniel A. Wren.

Britain and the Economic Problem of the Cold War: The Political Economy and the Economic Impact of the British Defence Effort, 1945-1955. By Till Geiger. Reviewed by Peter Howlett.

Plantation Jamaica, 1750-1850: Capital and Control in a Colonial Economy. By B. W. Higman. Reviewed by Kathleen E. A. Monteith.

Développement économique et état central (1815-1914): Un siècle de politique douanière suisse au service des élites [Economic Development and the Centralized State (1815-1914): A Century of Swiss Customs Policy at the Service of the Elites]. By Cédric Humair. Reviewed by Pierre-Yves Donzé.

Genoa and the Sea: Policy and Power in an Early Modern Maritime Republic, 1559-1684. By Thomas Allison Kirk. Reviewed by Luisa Piccinno.

Dictatorship and Demand: The Politics of Consumerism in East Germany. By Mark Landsman. Reviewed by James C. Van Hook.

The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. By Marc Levinson. Reviewed by Shane Hamilton.

The Hudson: A History. By Tom Lewis. Reviewed by Evan Cornog.

Business and Public Management in the U.K., 1900-2003. By Duncan McTavish. Reviewed by Robert Millward.

Bruges, Cradle of Capitalism, 1280-1390. By James M. Murray. Reviewed by Kathryn Reyerson.

The Master of Seventh Avenue: David Dubinsky and the American Labor Movement. By Robert D. Parmet. Reviewed by Nancy L. Green.

Property and Civil Society in South-Western Germany, 1820-1914. By Jonathan Sperber. Reviewed by Mark Spoerer.

The Mercery of London: Trade, Goods and People, 1130-1578. By Anne F. Sutton. Reviewed by Richard Goddard.

Merchants, Midwives, and Laboring Women: Italian Migrants in Urban America. By Diane C. Vecchio. Reviewed by Hasia Diner.

Hollywood's Road to Riches. By David Waterman. Reviewed by Douglas Gomery.

Shopping in the Renaissance: Consumer Cultures in Italy, 1400-1600. By Evelyn Welch. Reviewed by Francesca Polese.