THE CORPORATE FINANCE FUNCTION: AN OUTLINE OF ITS HISTORY

Abstract

Corporate finance is central to the management of today’s firms. This can be negatively perceived
by the public as it suggests that money dominates other aspects of business. Among scholars,
the essence or the function of entrepreneurs remains a subject of debate. The objective of
the article is to present the emergence of corporate finance from a historical perspective and
to identify different stages in the process. Corporate finance has now entered a phase where there is a strong mathematical component and where highly technical skills are required.
Nonetheless, the question of the purpose of the firm remains to be resolved and it is argued
that an historical approach can enrich its understanding and encourage a more balanced view.