What Determines the Use of Capital Budgeting Methods? Evidence from Swedish listed companies
AbstractThe choice of capital budgeting methods used by companies listed on the Stockholm Stock Exchange (SSE) is examined using multivariate regression analysis on questionnaire data from 2005 and 2008. Both recommended and non-recommended methods are found to be commonly used, with large companies using capital budgeting methods more frequently than small firms. The choice of capital budgeting methods is also influenced by leverage, growth opportunities, dividend pay-out ratios, the choice of target debt ratio, the degree of management ownership, foreign sales, industry, and individual characteristics of the CEO. The total use of capital budgeting methods is lower in Swedish companies compared to U.S. and continental European companies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HUI Research in its series HUI Working Papers with number 57.
Length: 37 pages
Date of creation: 16 Feb 2012
Date of revision:
Contact details of provider:
Postal: HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden
Phone: +46 (0)8 762 72 80
Fax: +46 (0)8 679 76 06
Web page: http://www.hui.se/
More information through EDIRC
Investment decisions; project valuation; capital budgeting techniques; Swedish listed companies.;
Find related papers by JEL classification:
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brounen, D. & de Jong, A. & Koedijk, C.G., 2004. "Corporate Finance In Europe Confronting Theory With Practice," ERIM Report Series Research in Management ERS-2004-002-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Smid, P. & Yao, L. & Hermes, N., 2006.
"Capital Budgetting Practices: A comparative Study of the Netherlands and China,"
06E02, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Hermes, Niels & Smid, Peter & Yao, Lu, 2007. "Capital budgeting practices: A comparative study of the Netherlands and China," International Business Review, Elsevier, vol. 16(5), pages 630-654, October.
- Stanley, Marjorie T & Block, Stanley B, 1984. "A Survey of Multinational Capital Budgeting," The Financial Review, Eastern Finance Association, vol. 19(1), pages 36-54, March.
- Healy, Paul M., 1985. "The effect of bonus schemes on accounting decisions," Journal of Accounting and Economics, Elsevier, vol. 7(1-3), pages 85-107, April.
- Graham, John R. & Harvey, Campbell R. & Rajgopal, Shiva, 2005.
"The economic implications of corporate financial reporting,"
Journal of Accounting and Economics,
Elsevier, vol. 40(1-3), pages 3-73, December.
- John R. Graham & Campbell R. Harvey & Shiva Rajgopal, 2004. "The Economic Implications of Corporate Financial Reporting," NBER Working Papers 10550, National Bureau of Economic Research, Inc.
- Kwong, Han Chun, 1986. "The sophistication of capital budgeting in Malaysian companies," Omega, Elsevier, vol. 14(2), pages 175-181.
- Han Donker & Bernard Santen & Saif Zahir, 2009. "Ownership structure and the likelihood of financial distress in the Netherlands," Applied Financial Economics, Taylor & Francis Journals, vol. 19(21), pages 1687-1696.
- Eng, L. L. & Mak, Y. T., 2003. "Corporate governance and voluntary disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 22(4), pages 325-345.
- Segelod, Esbjörn, 1995. "Resource allocation in divisionalized groups : a survey of major Swedish groups," Working Papers 1995:3, Uppsala University, Department of Business Studies.
- Sandahl, Gert & Sjogren, Stefan, 2003. "Capital budgeting methods among Sweden's largest groups of companies. The state of the art and a comparison with earlier studies," International Journal of Production Economics, Elsevier, vol. 84(1), pages 51-69, April.
- Giang Truong & Graham Partington & Maurice Peat, 2008. "Cost-of-Capital Estimation and Capital-Budgeting Practice in Australia," Australian Journal of Management, Australian School of Business, vol. 33(1), pages 95-121, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Nilsson).
If references are entirely missing, you can add them using this form.