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Narratives in managers’ corporate finance decisions

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  • Les Coleman
  • Krishnan Maheswaran
  • Sean Pinder

Abstract

This article uses the extended case method to explore senior executives’ corporate finance decisions. We quantified firm’s finance practices using a mail survey, and then – to resolve puzzles in managers’ decision processes – conducted face‐to‐face interviews with chief finance officers of large listed firms. The interviews identified six themes as consistent influences on finance decisions: pressures imposed by clienteles; constraints on resources; risk management; heuristics; real options; and sustainability. We conclude that managers are logical and rational in their decisions, but employ a wider range of criteria than assumed in conventional finance theories.

Suggested Citation

  • Les Coleman & Krishnan Maheswaran & Sean Pinder, 2010. "Narratives in managers’ corporate finance decisions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(3), pages 605-633, September.
    • Handle: RePEc:bla:acctfi:v:50:y:2010:i:3:p:605-633
    DOI: 10.1111/j.1467-629X.2010.00343.x
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    References listed on IDEAS

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    Cited by:

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    2. Soonchul Hyun & Jong Min Kim & Jeongsoo Han & Mark Anderson, 2022. "Female executive leadership and corporate social responsibility," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 3475-3511, September.
    3. Feng, Jingwen & Goodell, John W. & Shen, Dehua, 2022. "ESG rating and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 46(PB).
    4. Christine Brown & John Handley & James O'Day, 2015. "The Dividend Substitution Hypothesis: Australian Evidence," Abacus, Accounting Foundation, University of Sydney, vol. 51(1), pages 37-62, March.
    5. Manapon Limkriangkrai & SzeKee Koh & Robert B. Durand, 2017. "Environmental, Social, and Governance (ESG) Profiles, Stock Returns, and Financial Policy: Australian Evidence," International Review of Finance, International Review of Finance Ltd., vol. 17(3), pages 461-471, September.

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