Capital budgeting techniques and firm specific contingencies: A correlational analysis

Haka, Susan F.

doi:10.1016/0361-3682(87)90014-6

Cited by 56 publications

(58 citation statements)

References 28 publications

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“…From the above studies four categories of CBS can be discerned: a) Capital budgeting techniques (CBT) used to evaluate projects (Haka 1987); b) Risk management techniques (RMT) which supplement CBT by assessing project uncertainty (Verbeeten 2006); c) Capital budgeting procedures (CBP) which provide formal processes for projects (Alkaraan & Northcott 2013); and d) Non-financial information (NFI) which provides qualitative measurement of strategic factors important in making project decisions (Alkaraan & Northcott 2006).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Prior studies provide support for firms that faced more certain environments, typically selected sophisticated systems and delivered superior performance under these conditions than they would have had they had selected naïve CBT systems (Haka 1987). Sophisticated CBT incorporate the time value of money to estimate project investment outcomes (e.g.…”

Section: Environmental Uncertaintymentioning

confidence: 99%

“…There are four categories of CBS -capital budgeting techniques (CBT) used to evaluate project investments (Haka 1987); risk management techniques (RMT) which supplement CBT by assessing uncertainty associated with project investments (Verbeeten 2006); capital budgeting procedures (CBP) which provide formal processes for project investments (Alkaraan & Northcott 2013); and non-financial information (NFI) which may supplement CBT and RMT when financial measurement of project outcomes is not possible (Chen 2008). We focus on these categories of CBS because to our knowledge prior studies have not captured these while examining the link between NC and CBS.…”

Section: Introductionmentioning

confidence: 99%

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Does National Culture Impact Capital Budgeting Systems?

Graham

Sathye

2017

AABFJ

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We examine how national culture impacts organisational selection of capital budgeting systems to develop our understanding of what influence a holistic formulation of national culture has on capital budgeting systems. Such an understanding is important as it would not only provide a clearer link between national culture and capital budgeting systems and advance extant literature but would also help multinational firms that have business relationships with Indonesian firms in suitably designing strategies. We conducted semi-structured interviews of selected finance managers of listed firms in Indonesia and Australia. Consistent with the contingency theory, we found that economic, political, legal and social uncertainty impact on the use of capital budgeting systems. The levels of uncertainty were higher in Indonesia than Australia and need to be reckoned in the selection of capital budgeting systems used by firms. We also found that firms are influenced by project size and complexity, when selecting capital budgeting systems. KeywordsCapital budgeting systems, National culture, Indonesia, Australia. AbstractWe examine how national culture impacts organisational selection of capital budgeting systems to develop our understanding of what influence a holistic formulation of national culture has on capital budgeting systems. Such an understanding is important as it would not only provide a clearer link between national culture and capital budgeting systems and advance extant literature but would also help multinational firms that have business relationships with Indonesian firms in suitably designing strategies. We conducted semi-structured interviews of selected finance managers of listed firms in Indonesia and Australia. Consistent with the contingency theory, we found that economic, political, legal and social uncertainty impact on the use of capital budgeting systems. The levels of uncertainty were higher in Indonesia than Australia and need to be reckoned in the selection of capital budgeting systems used by firms. We also found that firms are influenced by project size and complexity, when selecting capital budgeting systems. JEL Classification: M40

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Section: Literature Reviewmentioning

confidence: 99%

Section: Environmental Uncertaintymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Does National Culture Impact Capital Budgeting Systems?

Graham

Sathye

2017

AABFJ

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“…S. Haka (1987) opracował i przetestował podejście uwarunkowań sytuacyjnych, dzię-ki któremu można przewidzieć, które przedsiębiorstwa mogą osiągać korzyści z zaawansowanych technik budżetowania kapitałów. Badane przez niego zewnętrzne czynniki sytuacyjne można zaliczyć do trzech grup.…”

Section: Budżetowanie Kapitałówunclassified

Teoria uwarunkowań sytuacyjnych w rachunkowości zarządczej

Nita¹

2013

ZTR

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“…There is only flimsy evidence in extant literature to support the impact of capital budgeting techniques on firm performance (e.g., Kim, 1981;Pike, 1988;Farragher, Kleiman and Sahu, 2001;Jiang, Chen and Huang, 2006;Vadeei et al, 2012) Therefore this study evaluates the moderating effect of uncertainty between capital budgeting practices and performance. So, study is an endeavour to build on earlier findings examining the factors influencing capital budgeting practices (Aggarwal, 1980;Schall and Sundem, 1980;Scapens and Sale, 1981;Kim, 1981;Mukherjee and Henderson, 1987;Haka, 1987;Klammer,Koch and Wilner,1991;Staw, 1991;Ho and Pike, 1992;Nutt, 1993;Sangster, 1993;Chen, 1995;Slagmulder, 1997;Bowman and Moskowitz, 2001;Zhu and Weyant, 2003;McGrath and Nerkar, 2004;Verbeeten, 2006;Donker, Santen, Zahir (2009);Brown and Sarma, 2007;Glaser, Schafers, andWeber, 2008, Daunfeldt andHartwig,2011).…”

Section: Theoretical View On Ccorporate Finance Theory and Corporate mentioning

confidence: 99%

Moderating Effect of Social Uncertainty between Capital Budgeting Practices and Performance

Kengatharan

2017

ijafr

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Capital budgeting is crucial in order for companies to sustain themselves, survive and flourish in markets and to increase shareholders" wealth. The performance of a firm depends on its effective investment decisions. Investing in the 'right' project has an influence on the success of the firm and its future growth. Even though risk and uncertainty factors carefully considered in investment decision making. Therefore, aim of this study was to evaluate the moderating effect of uncertainty between capital budgeting practices and performance based on Sri Lankan emerging market. The data were garnered from primary data and secondary data sources. The primary data were collected from 186 CFOs working in companies in Sri Lanka using self-administered questionnaires. The questionnaire was piloted with a sample of five CFOs. The secondary data were mainly collected from CSE via the Bloomberg website/annual reports for the 5 years period. In order to evaluate the moderating effect of uncertainty between capital budgeting practices and performance, social uncertainty has been considered in this study. Performance was measured by Tobin_q. Data were analysed using descriptive, inferential and multivariate analysis. Findings of the study revealed that an increased level of social uncertainty weakens the positive relationship between sophisticated capital budgeting practices and Tobin_q. In a similar way, an increased level of social uncertainty weakens the positive relationship between advanced capital budgeting practices and Tobin_q and vice versa. Overall, this study has made contribution as identified the moderating effect of uncertainty between the relationship of capital budgeting practices and performances. In a nutshell, beyond its valuable contribution, this study serves as a springboard for future research in many ways.

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Capital budgeting techniques and firm specific contingencies: A correlational analysis

Cited by 56 publications

References 28 publications

Does National Culture Impact Capital Budgeting Systems?

Does National Culture Impact Capital Budgeting Systems?

Teoria uwarunkowań sytuacyjnych w rachunkowości zarządczej

Moderating Effect of Social Uncertainty between Capital Budgeting Practices and Performance

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