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Strategy and capital budgeting techniques: the moderating role of entrepreneurial structure

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  • Zahida Sarwary

Abstract

This study explores how Miles and Snow's (1978) typology of strategy relates to a firm's choice of capital budgeting techniques (CBT) when the firm operates in a competitive market. Furthermore, it explores how this relationship is contingent on entrepreneurial structure. The study is based on data from 62 small and medium-sized enterprises (SMEs) operating on First North. The empirical data was collected using a survey and secondary data from annual reports and analysed with content analysis. The results show that an analyser strategy is positively related to the choice of sophisticated CBT, and a defender strategy is positively related to the choice of non-sophisticated CBT. Moreover, entrepreneurial structure positively moderates the relationship between prospector strategy and the choice of non-sophisticated CBT. The study also provides practical insights on how to align strategy, CBT, and structure among SMEs operating on competitive markets.

Suggested Citation

  • Zahida Sarwary, 2020. "Strategy and capital budgeting techniques: the moderating role of entrepreneurial structure," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 12(1), pages 48-70.
    • Handle: RePEc:ids:injmfa:v:12:y:2020:i:1:p:48-70
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    Cited by:

    1. Fang Wang, 2022. "AI‐enabled IT capability and organizational performance," Systems Research and Behavioral Science, Wiley Blackwell, vol. 39(3), pages 609-617, May.
    2. Shahid Ali & Qingyou Yan & Muhammad Sajjad Hussain & Muhammad Irfan & Munir Ahmad & Asif Razzaq & Vishal Dagar & Cem Işık, 2021. "Evaluating Green Technology Strategies for the Sustainable Development of Solar Power Projects: Evidence from Pakistan," Sustainability, MDPI, vol. 13(23), pages 1-29, November.

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