Cost of Capital Estimation and Capital Budgeting Practice in Australia

Truong, Giang; Peat, Maurice; Partington, Graham

doi:10.2139/ssrn.1019962

Cited by 43 publications

(70 citation statements)

References 16 publications

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“…Graham and Harvey, 2001;Ryan and Ryan, 2002;Baker et al, 2011), Asia and Pacific (e.g. Kester et al, 1999;Lam et al, 2007;Truong et al, 2008;Leon et al, 2008;Verma et al, 2009) and Western Europe (e.g. Arnold and Hatzopoulos, 2000;Sandahl and Sjögren, 2003;Brounen et al, 2004;Liljeblom and Vaihekoski, 2004;Hermes et al, 2007;Daunfeldt and Hartwig, 2011).…”

Section: Discussionmentioning

confidence: 99%

“…As far as foreign ownership is concerned, we expect companies with foreign capital will use CBM more often than companies with only domestic capital, because companies in more developed countries (from which the capital usually comes from) use these methods more often than companies in Poland (e.g. Graham and Harvey, 2001;Ryan and Ryan, 2008;Hermes et al, 2007;Truong et al, 2008). The literature suggests that company size is one of the most important variables associated with CBM selection -we expect larger companies will use CBM more often than small companies (e.g.…”

Section: Research Methodology and Methodsmentioning

confidence: 99%

“…Another argument which made the author use survey research was the desire to compare the study results with the results of research conducted in other countries -a comparison in the space dimension (e.g. Kester et al, 1999;Arnold and Hatzopoulos, 2000;Graham and Harvey, 2001;Sandahl and Sjögren, 2003;Bruonen et al, 2004;Hermes et al, 2007;Truong et al, 2008or Andor et al, 2011 -such a comparison would not be possible using the case study method.…”

Section: Research Methodology and Methodsmentioning

confidence: 99%

“…Australia (Truong et al, 2008), Canada (Graham and Harvey, 2001), France (Brounen et al, 2004), Germany (Brounen et al, 2004), the Netherlands (Hermes et al, 2007), Sweden (Sandahl and Sjögren, 2003), the UK (Brounen et al, 2004), and the USA (Graham and Harvey, 2001). The results of the studies are widely known, especially in academic circles, and they undoubtedly had an influence on the development of theory and its teaching as well as its practical use.…”

Section: Introductionmentioning

confidence: 99%

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Czynniki determinujące wybór metod budżetowania kapitałowego w przedsiębiorstwach działających w Polsce

Wnuk-Pel

2015

ZTR

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The paper aimed to explore the extent of the use of capital budgeting methods and also factors determining their selection in companies operating in Poland. The study fills the gap in the literature regarding capital budgeting practices by verifying two hypotheses: H1, stating that the diffusion of capital budgeting methods in companies operating in Poland is similar to other Central and East European (CEE) countries and lesser than in more developed countries, and H2, stating that the type of a company's activity, equity capital origin, company size and magnitude of capital expenditure budget is associated with capital budgeting method (CBM) selection. The research carried out enabled Hypothesis 1 to be verified partly positively, meaning that the majority of companies use: NPV, sensitivity analysis, scenario analysis and formalization of investment appraisal. The diffusion of CBM in Poland is therefore similar to other CEE countries and lesser than in more developed countries, e.g. the USA or UK. The study results also enabled Hypothesis 2 to be verified partly positively, meaning that: the large size of a company's capital expenditure budget and company size have a positive association with the use of 6 methods respectively, foreign ownership has a positive association with the use of 5 methods and the company's activity is associated with the use of 1 method. The study results also enabled Hypothesis 2 to be verified partly positively meaning that the use of two capital budgeting techniques based on discounted cash flows (together IRR and NVP) significantly increases when a company has foreign ownership and when the capital expenditure budget is large. Other tested independent variables (type of main activity and company size) show no significant association with the use of capital budgeting appraisal methods based on discounted cash flows.Keywords: management accounting, capital budgeting, Poland, survey, investment decisions. Streszczenie Czynniki determinujące wybór metod budżetowania kapitałowego w przedsiębiorstwach działających w PolsceCelem artykułu jest zbadanie stopnia wykorzystania metod budżetowania kapitałowego oraz czynników determinujących wybór tych metod w przedsiębiorstwach działających w Polsce. Badanie wypełnia zidentyfikowaną w literaturze lukę badawczą poprzez zweryfikowanie dwóch hipotez: H1, stwierdzającej, 218Tomasz Wnuk-Pel że dyfuzja metod budżetowania kapitałowego w przedsiębiorstwach działających w Polsce jest podobna jak w innych krajach Europy Środkowej i Wschodniej i mniejsza niż w krajach wyżej rozwiniętych, oraz H2, zgodnie z którą rodzaj działalności przedsiębiorstwa, pochodzenie kapitału własnego, wielkość przedsiębiorstwa oraz wielkość budżetu inwestycyjnego mają wpływ na wybór metod oceny opłacalności inwestycji. Przeprowadzone badanie pozwoliło na zweryfikowanie hipotezy 1 częściowo pozytywnie, ponieważ większość przedsiębiorstw działających w Polsce wykorzystuje NPV, analizę wrażliwości, analizę scenariuszy oraz formalizację oceny opłacalności inwestycji. Dyfuz...

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Section: Discussionmentioning

confidence: 99%

Section: Research Methodology and Methodsmentioning

confidence: 99%

Section: Research Methodology and Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Czynniki determinujące wybór metod budżetowania kapitałowego w przedsiębiorstwach działających w Polsce

Wnuk-Pel

2015

ZTR

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“…It should be mentioned that financial management of investment process is especially relevant at present. To increase the effectiveness of investment activity, domestic economic entities aim to pool their financial resources [16][17][18][19][20]. At the same time, the specificity of investment activity lies in pooling capacities of financial resources of the production sector, the financial sector, human capital, the government sector.…”

Section: Introduction To the Problemmentioning

confidence: 99%

Financial support of investment process

Ермошина¹,

Yulenkova²

2017

Proceedings of the International Conference on Trends of Technologies and Innovations in Economic and Social Studies 2017

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-Investment activity is an important indication of economic development of the country and one of the main criteria of steady economic growth. Investment intensity greatly influences the solution of major macroeconomic tasks: structural adjustment in national economy, formation of favourable economic and financial climate, development of innovative business, development of competitive products, increase of tax base, replenishment of budget revenues, creating more employment, extention of enterprises' activity, poverty reduction. Enterprises' investment activity is determined by the role of capital investment in the economic development of the country. Increasing the levels of investment provides the growth of industrial production, improvement of innovative capacity, which will contribute to strenthening the position of the country in the world market. To achieve these objectives, it is crucial to create national sound technology of investment and the system of financial security of the investment process in the Russian Federation. Nowadays the problem of developing the system of financial security of the investment process should become one of the important tasks of government economic policy, which is aimed at achieving steady economic growth and cyclical up-ticks in economy in general. In a globalized world and development of knowledge-based economy, the improvement of investment climate is impossible without establishing an effective system of financial security. Thus, today the development of the system of financial security of the investment process is of considerable social and economic importance for the development of the country. To this end, it is necessary to design a further theoretical framework and to develop methodological and practical guidelines to its effective implementation. In this context, the artcile specifies the basic components of favourable financial and economic climate for the development of the investment process with the modernization of the economy, presents a regression model that helps to evaluate the degree of impact on the index of investment in the fixed capital in the Russian Federation, its principal sources of formation and establishes the dependence of innovative development from gross and national income. According to the authors, it will contribute to the formation of regional segment of the national innovative system.

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Industrial Policy in a Small Open Economy: The Case of Ireland

Gray¹

2014

Economic Planning and Industrial Policy in the Globalizing Economy

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Cost of Capital Estimation and Capital Budgeting Practice in Australia

Cited by 43 publications

References 16 publications

Czynniki determinujące wybór metod budżetowania kapitałowego w przedsiębiorstwach działających w Polsce

Czynniki determinujące wybór metod budżetowania kapitałowego w przedsiębiorstwach działających w Polsce

Financial support of investment process

Industrial Policy in a Small Open Economy: The Case of Ireland

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