A1 Vertaisarvioitu alkuperäisartikkeli tieteellisessä lehdessä
Determinants of capital budgeting methods and hurdle rates in Nordic firms
Tekijät: Brunzell T, Liljeblom E, Vaihekoski M
Kustantaja: WILEY-BLACKWELL
Julkaisuvuosi: 2013
Journal: Accounting and Finance
Tietokannassa oleva lehden nimi: ACCOUNTING AND FINANCE
Lehden akronyymi: ACCOUNT FINANC
Vuosikerta: 53
Numero: 1
Aloitussivu: 85
Lopetussivu: 110
Sivujen määrä: 26
ISSN: 0810-5391
DOI: https://doi.org/10.1111/j.1467-629X.2011.00462.x
Verkko-osoite: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1742882
Tiivistelmä
We study the determinants for the choice of capital budgeting methods and the setting of hurdle rates (WACCs) in five Nordic countries. Combining survey data with a rich set of determinants, including ownership data, CFO characteristics, and financial data, we find that the use of the Net Present Value method and the sophistication of the capital budgeting are related to firm characteristics, variables proxying for real option features in investments and CFO characteristics (age and education). We also find support for significantly higher hurdle rates than motivated by economic theory. The premium is weakly positively related to managerial short-term pressure and strongly negatively related to the sophistication level of the firm's capital budgeting.
We study the determinants for the choice of capital budgeting methods and the setting of hurdle rates (WACCs) in five Nordic countries. Combining survey data with a rich set of determinants, including ownership data, CFO characteristics, and financial data, we find that the use of the Net Present Value method and the sophistication of the capital budgeting are related to firm characteristics, variables proxying for real option features in investments and CFO characteristics (age and education). We also find support for significantly higher hurdle rates than motivated by economic theory. The premium is weakly positively related to managerial short-term pressure and strongly negatively related to the sophistication level of the firm's capital budgeting.
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