New Books Network Donald Chew, "The Making of Modern Corporate Finance: A History of the Ideas and How They Help Build the Wealth of Nations" (Columbia Business School Publishing, 2025)
Feb 18, 2026
Donald H. Chew Jr., longtime editor of the Journal of Applied Corporate Finance and author, dissects the ideas that shaped modern corporate finance. He traces U.S. market mechanisms that allocate capital, the rise and fall of conglomerates, activist interventions and private equity dynamics. He also contrasts governance models across countries and debates leverage, CEO incentives, and long-term investment pressures.
AI Snips
Chapters
Books
Transcript
Episode notes
Stop Starving Growth For Struggling Cores
- Avoid subsidizing failing core units at the expense of new growth businesses within conglomerates.
- Reallocate capital to promising units or divest underperforming divisions to unlock value.
GE's Turnaround From Conglomerate To Value
- General Electric under Jack Welch exemplified old-fashioned conglomerate finance focused on quarterly earnings and diversification.
- Larry Culp later broke GE into independent businesses and doubled its market value by refocusing capital allocation.
Leverage Balances Over- And Underinvestment
- Miller sees investment decisions, not capital structure, as value drivers; Jensen and Myers highlight leverage's control trade-offs.
- Use debt to discipline excess capital but beware underinvestment in growth when leverage is too high.
