Investors’ Choices and Strategic Financial Decisions of the Companies. Evidence from an Analysis of the Capital Budgeting Policy Implications on Shares Valuation

Andreea Curmei-Semenescu, Elena Tilica and Cătălin Valeriu Curmei
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Andreea Curmei-Semenescu: Department of Finance and CEFIMO, Faculty of Finance and Banking, Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, 010961 Bucharest, Romania
Cătălin Valeriu Curmei: UNESCO Department for Business Administration, Faculty of Business Administration in Foreign Languages, Bucharest University of Economic Studies, 2 Calea Grivitei Street, 010731 Bucharest, Romania

Sustainability, 2021, vol. 13, issue 8, 1-31

Abstract: The paper investigates the relationship between companies and their investors in the capital market as part of relationship marketing. It focuses on investors’ preference for a certain capital budgeting policy employed by listed companies. By using statistical analysis, we study whether investors’ reactions can be linked to different patterns of capital budgeting decisions. Our database includes a high number of countries, both developed and emerging, which leads us to focus our analysis on the differences that might occur in investors’ preferences due to specific traits of these markets. Additionally, we include a comparison between investors’ preferences and the information given by the accounting-based performance recorded both in the year of the investment policy and in the next fiscal year. Thus, we observe the extent and limits of the investors’ preference for an active capital budgeting decision, as well as the investors’ rationality around financial crisis.

Keywords: relationship marketing; investors’ preference; investors’ rationality; animal spirits; capital budgeting decisions; capital market development; financing system (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:8:p:4112-:d:531584

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