Skip to main content
SpringerLink
Log in

Capital investment practices: A survey of large corporations in Malaysia, Singapore and Hong Kong

  • Research Note
  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

This paper presents the results of a survey on the capital investment practices of large corporations in Malaysia, Singapore and Hong Kong. Our findings are fairly consistent with those from similar U.S. surveys. However, Malaysia, Singapore and Hong Kong companies seem to use multiple techniques, both simple and sophisticated, in evaluating investment projects, while U.S. companies appear to make great use of discounted cash-flow rate of return. Although Malaysia, Singapore and Hong Kong companies often make annual cash-flow forecasts over the life of a project, they do not undertake much analysis of risk involved in the project. Moreover, there is room for improving the practice of project implementation, the post-audit of implemented projects, and the use of post-audit data.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Baker, J.C. “Capital Budgeting in West European Companies”,Management Decision Vol. 19 No. 1, 1981, pp. 3–10.

    Google Scholar 

  • Brigham, E.F.Financial Management: Theory and Practice 4th ed., New York: The Dryden Press, 1985.

    Google Scholar 

  • Farragher, E.J. “Capital Budgeting Practices of Non-Industrial Firms”, Unpublished paper, 1984.

  • Fremgen, J.M., “Capital Budgeting Practices: A Survey”, Management Accounting, May, 1973, pp. 19–25.

  • Gitman, L. and J.R. Forrester, “A Survey of Capital Budgeting Techniques Used by Major US Firms”, Financial Management, Fall, 1977, pp. 66–71.

  • Han, C.K., “The Sophistication of Capital Budgeting in Malaysian Companies”, OMEGA, Vol. 14 No. 2, 1986, pp. 175–86.

    Google Scholar 

  • Hendricks, J.A., “Capital Budgeting Practices Including Inflation Adjustments: A Survey”, Managerial Planning, January–February, 1983. pp. 22–28.

  • Hoskins, C.G. and M.J. Dunn, “The Economic Evaluation of Capital Expenditure Proposals Under Uncertainty: The Practice of Large Corporations in Canada”, Journal of Business Administration, Fall, 1974, pp. 45–55.

  • Istvan, D.F., “Capital Expenditure Decisions: How They Are Made in Large Corporations”, Indiana Business Report No. 33, Bureau of Business Research, Indiana University, Bloomington, Indiana, 1961.

    Google Scholar 

  • Kim, S.H. and E.J. Farragher, “Current Capital Budgeting Practices”, Management Accounting, June, 1981, pp. 26–29.

  • Klammer, T., “Empirical Evidence on the Application of Sophisticated Capital Budgeting Techniques”, Journal of Business, Vol. 45 No. 3, July, 1972, pp. 387–397.

    Google Scholar 

  • Klammer, T.P. and M.C. Walker, “Continuing Increase in the Use of Sophisticated Capital Budgeting Techniques”, California Management Review, Vol. 27 No. 1, 1984, pp. 137–49.

    Google Scholar 

  • Mao, J.C.T., “A Survey of Capital Budgeting: Theory and Practice”, Journal of Finance, May, 1970, pp. 349–360.

  • Petry, G.H., “The Effective Use of Capital Budgeting Tools”, Business Horizons, Vol. 18, No. 5, October, 1975, pp. 57–65.

    Google Scholar 

  • Petty, J.W. and O.B. Bowlin, “Financial Manager and Quantitative Decision Methods”, Financial Management, Winter, 1976, pp. 32–41.

  • Petty, J.W., D.F. Scott, Jr. and M.M. Bird, “The Capital Expenditure Decision Making Process of Large Corporations”, The Engineering Economist, 20(3), Spring, 1975, pp. 159–172.

    Google Scholar 

  • Plfomn, N.P., Managing Capital Expenditures — Studies in Business Policy 107, New York: National Industrial Conference Board, 1963.

    Google Scholar 

  • Ross, M. “Capital Budgeting Practices of Twelve Large Manufacturers”, Financial Management, Winter, 1986, pp. 15–22.

  • Schall, L.D., G.L. Sundem and W.R. Geijsbeek, Jr., “A Survey and Analysis of Capital Budgeting Methods”, Journal of Finance, March, 1978, pp. 281–287.

  • Singhvi, G.S., “One Financial Executive's Response to Surveys”, Financial Management, Vol. 10 No. 5, Winter, 1981, pp. 82–83.

    Google Scholar 

  • Weston, J.F. and T.E. Copeland,Managerial Finance, 8th ed., New York: the Dryden Press, 1986.

    Google Scholar 

Download references

Authors
  1. Wong Kie Ann
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Edward J. Farragher
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Rupert K. C. Leung
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

Dr Wong Kie Ann is with the School of Management, National University of Singapore; Dr Edward J Farragner is with the Department of Finance, DePaul University, U.S.A.; and Mr Rupert K.C. Leung is with the Department of Business Management, Hong Kong Baptist College.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ann, W.K., Farragher, E.J. & Leung, R.K.C. Capital investment practices: A survey of large corporations in Malaysia, Singapore and Hong Kong. Asia Pacific J Manage 4, 112–123 (1987). https://doi.org/10.1007/BF01732852

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF01732852

Keywords

Search

Navigation