What determines the use of capital budgeting methods? : Evidence from Swedish listed companies

Purpose: This paper aims to extend and contribute to prior research on the association between company characteristics and choice of capital budgeting methods (CBMs). Design/methodology/approach: A multivariate regression analysis on questionnaire data from 2005 and 2008 is used to study which factors determine the choice of CBMs in Swedish listed companies. Findings: Our results supported hypotheses that Swedish listed companies have become more sophisticated over the years (or at least less unsophisticated) which indicates a closing of the theory-practice gap; that companies with greater leverage used payback more often; and that companies with stricter debt targets and less management ownership employed accounting rate of return more frequent. Moreover, larger companies used CBMs more often. Originality/value: The paper contributes to prior research within this field by being the first Swedish study to examine the association between use of CBMs and as many as twelve independent variables, including changes over time, by using multivariate regression analysis. The results are compared to a US and a continental European study.

The Survivability of Swedish Emergency Management Related Research Centers and Academic Programs : A Preliminary Sociology of Science Analysis

The Survivability of Swedish Emergency Management Related Research Centers and Academic Programs: A Preliminary Sociology of Science Analysis Despite being a relatively safe nation, Sweden has four different universities supporting four emergency management research centers and an equal and growing number of academic programs. In this paper, I discuss how these centers and programs survive within the current organizational environment. The sociology of science or the sociology of scientific knowledge perspectives should provide a theoretical guide. Yet, scholars of these perspectives have produced no research on these related topics. Thus, the population ecology model and the notion of organizational niche provide my theoretical foundation. My data come from 26 interviews from those four institutions, the gathering of documents, and observations. I found that each institution has found its own niche with little or no competition – with one exception. Three of the universities do have an international focus. Yet, their foci have minimal overlap. Finally, I suggest that key aspects of Swedish culture, including safety, and a need aid to the poor, help explain the extensive funding these centers and programs receive to survive. 

The use of capital budgeting and cost of capital estimation methods in Swedish listed companies

In this paper Swedish listed companies’ use of capital budgeting and cost of capital estimation methods in 2005 and 2008 are examined. The relation between company characteristics and choice of methods is investigated and both within-country longitudinal and cross-country comparisons are made. Larger companies seem to have used capital budgeting methods more frequently than smaller companies. When compared to U.S. and continental European companies, Swedish listed companies employed capital budgeting methods less frequently. In 2005 the most common method for establishing the cost of equity was by asking the investors what return they required. By 2008 CAPM was instead the most utilised method, which could indicate greater sophistication. The use of project risk when evaluating investments also seems to have gained in popularity, while the use of company risk declined. Overall, the use of sophisticated capital budgeting and cost of capital estimation methods seem to be rising and the use of less sophisticated methods declining.