Thorstein Veblen's 1904 contributions to Q and insider/outsider analysis

The beginning of the 20th century saw the first steps in a tradition of leading economists explaining the link between corporate finance, investment and financial structure. The writings of John Maynard Keynes (1930), Gunnar Myrdal (1931, 1933) and James Tobin (1969) deal with the development of an investment theory based on the financial structure. In this context, we give a new presentation of Wicksellian and Keynesian theories. The initial impetus given by Knut Wicksell (1898) with his system of two interest rates must be emphasized (Schmidt, 1995). However, these studies do not mention Thorstein Veblen (1904, 1908, 1923), one of the founding fathers of institutionalism, who remains unknown, particularly in this tradition, although recent literature (Ganley, 2004; Gagnon, 2007; Cochrane, 2011; Mendez, 2012) considers that he made a real contribution to capital theory. He made an early American analysis of corporate governance structure, which emerged as a central issue in the early 20th century in light of the development of financial instruments, shareholder behavior and corporate equity valuation concerns. Our work is based on a critical review of the literature, which is guilty of omissions, lack of accuracy and errors of formalization. The theory of the non-neutrality of the financial structure remains wholly relevant today, so that in this paper, we focus on the reasons why Veblen's corporate financial analysis should not be forgotten.