Investment Decisions on Long-term Assets: Integrating Strategic and Financial Perspectives

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dc.contributor.authorFrezatti F.
dc.contributor.authorde Souza Bido D.
dc.contributor.authorda Cruz A.P.C.
dc.contributor.authorBarroso M.F.G.
dc.contributor.authorde Camargo Machado M.J.
dc.date.accessioned2024-03-13T01:04:31Z
dc.date.available2024-03-13T01:04:31Z
dc.date.issued2013
dc.description.abstractThis paper aimed to verify how companies formalise the decisions and control on long-term investments. In particular, an analysis of the published literature reveals a relevant gap between the strategic and financial perspectives in addressing this issue, and Agency Theory was proposed as a linking construct to bridge this gap. A survey was conducted among 82 companies, and the data were treated using the structural equation modelling technique. The results of this survey indicate that firms with intensive external funding use sophisticated capital budgeting methods more frequently when evaluating the profitability of their long-term investment proposals. As these methods require detailed information, these firms use additional appraisal mechanisms to conduct their investment analysis more frequently. Additional mechanisms are also used if the long-term investment is funded by external sources and perceived as a riskier investment. These deeply analysed long-term investment proposals often appear and are decided as a part of the strategic planning process instead of being strongly associated with the budgeting process. Finally, these long-term investments, which are funded externally, analysed using sophisticated methods and mechanisms and decided as a part of the strategic planning cycle, are more tightly controlled than other investments. These findings help to reduce the heuristics within the related literature. © 2013 Copyright European Accounting Association.
dc.description.firstpage297
dc.description.issuenumber2
dc.description.lastpage336
dc.description.volume22
dc.identifier.doi10.1080/09638180.2012.718672
dc.identifier.issn0963-8180
dc.identifier.urihttps://dspace.mackenzie.br/handle/10899/36608
dc.relation.ispartofEuropean Accounting Review
dc.rightsAcesso Restrito
dc.titleInvestment Decisions on Long-term Assets: Integrating Strategic and Financial Perspectives
dc.typeArtigo
local.scopus.citations11
local.scopus.eid2-s2.0-84877842460
local.scopus.updated2024-05-01
local.scopus.urlhttps://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=84877842460&origin=inward
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