Corporate beneficiaries of the mid-century wars: Respecifying models of corporate growth, 1939-1959

Objective. Accounts of corporate growth have emphasized strategies and organizational structures as explanatory variables. This has been the case even during those periods when the United States was involved in major wars. The authors argue that one important factor during these times, defense procurement, should be considered as a causal variable. Methods. This research builds on Neil Fligstein's analyses of growth over the 1939-59 period by adding measures of defense. Results. The evidence suggests that, even when controlling traditional organizational factors, defense spending had a large effect on those firms participating in the war effort. Furthermore, it is found that the mechanism responsible for that growth was a variety of incentives, provided by the government, for firms to expand. Conclusions. Organizational growth is a temporal process, and thus analyses of it must be historically specific. The magnitude of output required during World War II and the Korean War, the federal government's reliance on private firms to supply wartime necessities, and investment incentives were all important factors contributing to growth during this time.