بودجه بندی سرمایه در شرکت ها
Abstract
JEL classification
۱٫ Introduction
۲٫ Literature review
۳٫ Research design and methods
۴٫ Results and discussion
۵٫ Conclusions and recommendations
Author statement
Acknowledgements
Appendix A
References
Abstract
This study examines the evolution of the application of capital budgeting techniques. Previous studies mostly used cross -sectional inquiry to understand capital budgeting practices in firms. Only a few researchers have undertaken longitudinal studies to generalise the findings of individual cross -sectional studies to the wider population and to identify emerging trends in the use of capital budgeting techniques (CBTs). This longitudinal study survey s 7 8 studies o f capital budgeting practices across firms in India, South Africa, the United Kingdom (UK) and the United States of America (USA) for the period 1966 to 2016. The findings show that six capital budgeting techniques , namely net present value (NPV), internal rate of return (IRR), payback period (PBP), accounting rate of return (ARR), return on investment (ROI) and real option valuation (ROV) , are the most popular methods used for evaluating capital investment. Of these techniques, ROV is the least used; a general lack of familiarity with this technique and its complexity are the reasons most commonly cited for not using it. Another method used less than the first four techniques is ROI. However , this technique is of growing significance mainly in the UK, followed by the USA, South Africa , and India . Firms in the USA and UK have increased their use of IRR as a primary method for evaluating capital projects and have retained PBP as an ancillary technique to strengthen the information available when evaluating capital projects. Firms in India and South Africa are increasingly excluding both PBP and ARR methods and are increasingly using NPV for evaluating capital investments. Although this development is in line with the theory, it limits the scope of information available when evaluating capital projects.
Introduction
This paper examines the evolution of the application of capital budgeting techniques (CBTs) in selected developing countries (South Africa and India) and developed countries (United Kingdom and United States of America ) in recent decades. The period under review is 1966 to 2016. Previous researchers , such as Sangster (1993) and Pike (1996) , used longitudinal studies to generalise the findings of individual cross -sectional studies to the wider population and to identify emerging trends in the use of capital budgeting techniques. However, recent innovations in capital budgeting practices have resulted in the development and use of new techniques, such as real option valuation (ROV) methods. ROV was proposed by Myers (1977) and further developed for use in capital budgeting by authors such as Luehrman (1995) and Merton (1998) . Other capital budgeting techniques are modified internal rate of return, discounted payback period, Monte Carlo simulations and Economic Value Added (EVA) , to mention a few (Kengatharan, 2016; Rigopoulos, 2014). The continuing developments in CBT s make it important to undertake current research regarding present practices to be able to identify trends in the use of CBT s. Most of the previous studies (Andrews & Butler, 1986; Arnold & Hatzopoulos, 2000; Correia & Cramer, 2008; Hall & Millard, 2010; Kester & Robbins, 2011) in both developed and developing countries researched CBT practices using cross -sectional techniques. As a result, there is an information gap on how CBT preferences have evolved over the last five decades, and to what extent their evolution is aligned with the relevant theoretical developments. It is also unclear whether firms in developed and developing countries have preferences for using different CBT s.