Analysis of the Development of Financial Management Theory to Support Financial Research

Abstract

Financial research issues and trends continue to evolve today. Financial management discusses several issues that became a financial attraction in the 1950s related to corporate funding sources. The issue is emphasized on debt funding sources, maturity period extensions, forms of financial assets, increased use of financing sources. The issue continues to grow to this day. Financial management is always concerned with the company’s financial issues that address the financial aspects of the company and also the administrative side during the initial development of the company. Bookkeeping problems are related to the difference between capital and revenue, the administrative side resulting from growth and expansion, and of course financial adjustments are needed to strengthen companies that are experiencing financial difficulties. The problems raised in this study are how the development of financial management theory and the development of financial research until now, as well as how the application of financial management theory to financial research. This research uses qualitative methods. Data collection is carried out by data collection methods in qualitative research, namely observation, visual analysis, and literature study. The development of financial management theories as well as types of financial management research emerged gradually. The development of financial management theory has a history of financial thought can be grouped into several concepts that have their own developments. The foundations of modern financial theory stem from the application of neoclassical economic theory which already uses the assumption that individuals behave rationally. Until the1970s, the application of financial theory was growing up to the current concept, namely behavioral finance.