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How to strengthen the financial autonomy to boost investment in the company?

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  • Dhaoui, Elwardi

Abstract

Boost investment is the ultimate goal of every company. There are many strategies to achieving this goal. Indeed, each company imposes a duty to promote efficient investment. In this perspective, many contractors see that the financial autonomy is the solely or principally option for enhancing investment. This paper will focus on the factors that lead to the promotion of investment in the business, but it will insist on the preference of finance autonomy, which would represent a significant issue, allowing for a more coherent framework for promoting investment. Company needs to focus efforts in improving this option that provides direct sources of growth in term of investment, now and in the future because the movements towards financial autonomy started under the conditions of severe budgetary problems and fiscal constraints. Currently, financial autonomy is a recurrent notion in the economy, but some questions related to the processes of investment cannot be answered without a thorough analysis of the contents of local financial autonomy. Financial autonomy is not in itself desirable, but serves as a means to certain end. This paper explores this notion, its relationship with the dynamic of investment as well as its impact in the company’s perspectives. In our contemporary era, financial autonomy is seldom treated as a separate subject and never been investigated systematically. In order to be consistent with the objectives set by the current economic climate and the globalization, financial analysis should bypass this lack in favor of a new approach. For this purpose, this paper tries to give some possible reflections that help us to develop the analytical tool that may help us to improving the way towards the amplification of the analysis paradigm.

Suggested Citation

  • Dhaoui, Elwardi, 2013. "How to strengthen the financial autonomy to boost investment in the company?," MPRA Paper 63842, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63842
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    File URL: https://mpra.ub.uni-muenchen.de/87344/1/MPRA_paper_87344.pdf
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    References listed on IDEAS

    as
    1. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    2. Steve Bond & Costas Meghir, 1994. "Financial constraints and company investment," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 1-18, May.
    3. Beaver, Wh, 1966. "Financial Ratios As Predictors Of Failure," Journal of Accounting Research, Wiley Blackwell, vol. 4, pages 71-111.
    4. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    5. ciumag, marin & ciumag, anca, 2008. "The Indicators from the Financial Structure of the Balance Sheet," MPRA Paper 14862, University Library of Munich, Germany.
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    Cited by:

    1. Conceição Gomes & Cátia Malheiros & Filipa Campos & Luís Lima Santos, 2022. "COVID-19’s Impact on the Restaurant Industry," Sustainability, MDPI, vol. 14(18), pages 1-21, September.

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    More about this item

    Keywords

    financial autonomy; investment; operating cash flow; debt; financial risk; financial management.;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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