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 | | A History of Corporate Finance by Jonathan Barron Baskin, Jr, Paul J. Miranti ISBN-10: 9780521555142 ISBN-10: 0-521-55514-0 ISBN-13: 9780521555142 ISBN-13: 978-0-521-55514-2 Hardcover 1997-02-28 Cambridge University Press Find Lowest Price |
Editorials | ||
Product Description This study focuses on the role of institutions and organizations in the development of corporate finance from the Italian merchant banks of the Renaissance through the formation of conglomerates and leveraged-buy-out partnerships in contemporary Wall Street. It also puts forth a compelling argument for the closer integration of historical and quantitative research methodologies in financial theory. The epilogue contains an original algorithm that explains the relationship between the short-term, firm-specific factors and longer-term environmental elements that have shaped the historical development of finance. | ||
Book Description This study focuses on the role of institutions and organizations in the development of corporate finance from the Italian merchant banks of the Renaissance through the formation of conglomerates and leveraged-buy-out partnerships in contemporary Wall Street. It also puts forth a compelling argument for the closer integration of historical and quantitative research methodologies in financial theory. The epilogue contains an original algorithm that explains the relationship between the short-term, firm-specific factors and longer-term environmental elements that have shaped the historical development of finance. | ||
Reviews | ||
Dry as Dust The history of corporate finance is a fascinating subject, overflowing with interesting people and dramatic events that affect not only finance but the man on the street. Unfortunately the authors of this book have no interest in breathing life into the story of capitalism. Instead what a reader will get is a dry list of facts. The regulated company evolved into the joint stock company for the following reasons. The East India Company developed the following innovations. Its example paved the way for the next step, and so on. The book has all the feeling of a dull term paper written by a college student who simply summarized the obvious secondary sources. Each step seems to lead naturally, ploddingly to the next, in a march that seems both uninteresting and inevitable. While the authors have done an impressive job of bringing many important facts over a broad context together in one volume, that's all they've done. And I detected a subtle smugness, like that of a Monday morning quarterback, as the authors pointed out flaws in earlier structures. To me they seemed unaware that the flaws in today's systems will look as obvious to future scholars as those of the past seem now to us. I also encountered what I considered to be lapses in scholarship (or insight) brought about by the "Ivory Tower" phenomenon of having only a an academic understanding of processes undertaken by others. The coverage of LBOs is an example. It's easy in hindsight to go on about the excesses of leveraged buyout era of the 1980s. Baskin and Miranti cover this fully, detailing many of the problems that arose. But was there any rationale for the LBOs in the first place, or were they simply the instruments of greedy financial conmen? On p291 the authors begin one paragraph with the following: "One important method applied by LBO organizers to achieve superior performance was to change ownership structures." Having lived through that era, I'm aware of how misleading that statement can be. At the time there were a number of public companies that weren't well managed and had languishing stock prices that not only didn't reflect the firms' potential, but didn't even reflect the value of their current operations. Traditionally this obvious problem (the stock's trading at $35 and it's worth $60) had no easy solution. Until LBOs came along (both friendly and unfriendly), there was little that could be done. LBO firms were able to convince investors that a company was undervalued, provide a method for quickly realizing this value, and prove that it could be done. Many decry the fact that jobs were sometimes lost in the process; a point worth considering. But this doesn't take away from the fact everyone who owns stocks today has a portfolio that's more fairly and appropriately valued because of the rationalizing force introduced by leveraged buyouts. Valuing these companies wasn't the innovation, any grad student could have done that. It was coming up with a way to prove that these valuations mattered, and that management would be held accountable for them, that was the innovation. Now when incompetent management is forced out as a result of an LBO, is that a "change in ownership structure?" I guess so. But for me the phrase fails to capture the essence of what is taking place. Is quickly realizing the value in a company whose stock is trading too cheaply "achieving superior performance?" I wouldn't call it that, but I suppose an academic might. The point here is that an intelligent laymen looking to expand his or her knowledge and become interested in a fascinating topic will be poorly served by this type of phraseology. Not recommended. | ||
Strictly for Academic Libraries This jargon-laden and lifeless book, filled with undefined terms from business law and corporate finance, covers a vast historical landscape, from the Medicis to LBOs (there's even an appendix on finance in the classical world). Unfortunately, Baskin doesn't manage this huge volume of material by picking out key events and themes. Instead, he repeatedly compresses complex institutional and financial developments into a few paragraphs of leaden prose, squeezing in as much material as possible. Time and again I found myself reading and rereading a paragraph and wondering what it meant. Corporate finance students might have better luck than I did, but I doubt that even they would enjoy the book. In fairness to Baskin, the book is refreshingly skeptical about academic finance theories, and it does draw together material otherwise hidden in technical books and journals -- but those aren't good reasons for laymen read it. They would get more out of better-written books by Charles Kindleberger or John Kenneth Galbraith. | ||
Insightful! This thorough, scholarly study balances broad concepts with specific details of the history of finance from the 15th through 20th centuries. Though authors Jonathan Barron Baskin and Paul J. Miranti Jr. assume that the reader has some knowledge of finance and relevant terms, they avoid mathematical models and jargon in favor of plain language. Their book is accessible and valuable to lay readers as well as trained economists, historians, students of finance and anyone coping with an emerging market. The issues they examine remain surprisingly relevant, because - as they soon make clear - the problems that historical markets once confronted are the same issues of risk and information that markets face today, particularly emerging markets. As a historical study, this book presents no particular prescriptions for success or future action. However, we at getAbstract.com recommend its explanation of why some structures succeeded and others failed, because those forces have clear implications today. | ||