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Puzzling out the choice of capital budgeting techniques: among high-growth small and medium sized firms
Kristianstad University, Faculty of Business, Avdelningen för ekonomi. Kristianstad University, Faculty of Business, Research environment Governance, Regulation, Internationalization and Performance (GRIP. Lunds universitet.
2019 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The aim of this dissertation is to explore the drivers of practitioners’ choices of capital budgeting techniques(CBT). The mainstream literature suggests that sophisticated CBT (SCBT) will best guide organizations inevaluating important strategic investments. Small and medium-size enterprises (SMEs) choose to go againstthat “wisdom” and choose non-sophisticated CBT (NSCBT).

Instead of following the prescriptive path of the mainstream literature, this dissertation adopts an explorativedesign, exploring qualitatively and quantitatively the reasons SMEs choose NSCBT or SCBT to evaluatestrategic investments. Based on the findings in the four included papers, the dissertation describes whenand under which conditions Swedish high-growth SMEs choose different types of CBT. The focus onSwedish high-growth SMEs listed on First North allowed the capture of choices for both SCBT and NSCBT.

Institutional and firm-specific forces, decision-maker–specific attributes, market and contextual factorsemerge as important drivers of the choices of CBT made by high-growth SMEs. The dissertation suggeststhat these multi-level determinants define the limits of decision-makers’ discretion and how they inform thechoices of CBT made by high-growth SMEs.

Place, publisher, year, edition, pages
Lund: Lund University Open Access, 2019. , p. 214
Keywords [en]
Capital budgeting techniques, decision making, strategic investments, theory-practice gap, practice-theory gap, SMEs, First North
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hkr:diva-21157ISBN: 978-91-7895-314-1 (print)OAI: oai:DiVA.org:hkr-21157DiVA, id: diva2:1463268
Public defence
2019-11-22, Crafoordsalen, Holger Crafoords Ekonomicentrum, Tycho Brahes väg 1, Lund., Lund, 11:00 (English)
Supervisors
Available from: 2020-09-01 Created: 2020-09-01 Last updated: 2020-09-01Bibliographically approved
List of papers
1. Capital budgeting techniques in SMEs: a literature review
Open this publication in new window or tab >>Capital budgeting techniques in SMEs: a literature review
2019 (English)In: Journal of Accounting and Finance, Vol. 19, no 3, p. 97-114Article in journal (Refereed) Published
Abstract [en]

This paper provides a systematic literature review of research in the field of capital budgeting techniques (CBT) among small- and medium- sized firms. In total, 26 studies published between 1964 and 2017 were reviewed. It covers three areas: the type of CBT that have been used across sizes and locations; determinants associated with the choice of CBT; and the methods and analysis techniques used in previous studies. SWOT analysis was done to systematise the findings and to identify the shortcoming and strengths in existing literature. For each area, potential areas of research to further the field are suggested.

Keywords
Accounting, Finance, Capital budgeting techniques, SMEs, Swot analysis
National Category
Economics and Business
Identifiers
urn:nbn:se:hkr:diva-21097 (URN)10.33423/jaf.v19i3.2035 (DOI)
Available from: 2020-08-28 Created: 2020-08-28 Last updated: 2020-09-01Bibliographically approved
2. Strategy and capital budgeting techniques: the moderating role of entrepreneurial structure
Open this publication in new window or tab >>Strategy and capital budgeting techniques: the moderating role of entrepreneurial structure
2020 (English)In: International Journal of Managerial and Financial Accounting, ISSN 1753-6715, E-ISSN 1753-6723, Vol. 12, no 1, p. 48-70Article in journal (Refereed) Published
Abstract [en]

This study explores how Miles and Snow's (1978) typology of strategy relates to a firm's choice of capital budgeting techniques (CBT) when the firm operates in a competitive market. Furthermore, it explores how this relationship is contingent on entrepreneurial structure. The study is based on data from 62 small and medium-sized enterprises (SMEs) operating on First North. The empirical data was collected using a survey and secondary data from annual reports and analysed with content analysis. The results show that an analyser strategy is positively related to the choice of sophisticated CBT, and a defender strategy is positively related to the choice of non-sophisticated CBT. Moreover, entrepreneurial structure positively moderates the relationship between prospector strategy and the choice of non-sophisticated CBT. The study also provides practical insights on how to align strategy, CBT, and structure among SMEs operating on competitive markets.

Keywords
strategy, strategic planning tools, capital budgeting techniques, CBT, organisational structure, entrepreneurial structure, content analysis
National Category
Economics and Business
Identifiers
urn:nbn:se:hkr:diva-21021 (URN)10.1504/IJMFA.2020.107001 (DOI)000552005800003 ()
Available from: 2020-08-27 Created: 2020-08-27 Last updated: 2020-09-01Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
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  • de-DE
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Output format
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