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.

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 bio-technology 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.

In the early 1970s, a few computer companies began to form partnerships with other firms in the international computer industry for the purpose of sharing research and development (R&D) resources. This trend did not take hold in a meaningful way until the beginning of the 1980s. Our study focuses on this particular sector because it represents a major industry in which interfirm R&D partnering occurs.