Product Innovation and the Growth of the Large Firm: The Case of Air Liquide, 1902-1930

Abstract

This paper traces the early development of Air Liquide, the world’s largest producer of industrial gases. By illustrating the dynamism of French industrial capitalism in the early twentieth century, the Air Liquide story calls into question the image of the French as also-rans in the Second Industrial Revolution. The story of Air Liquide also shows that geographical expansion and product diversification do not always lead to adoption of the multidivisional form (as in the case of Du Pont). Instead, Air Liquide remained a relatively small corporation at the center of a cluster of related firms. This paper suggests that the timing of product diversification may explain the differing organizational histories of Air Liquide and Du Pont.