Capital Investment Decisions of Micro, Small and Medium Enterprises: The Case of Digos City

Jona Princess Relativo, Mildred Sumayang, Sarah Jean Diasana and John Vianne Murcia

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examined the capital investment decisions of micro, small and medium enterprises, with the aim of assessing its current levels and its conditions across industries in Digos City. Questionnaires measuring the four phases of capital investment decisions were administered to a stratified random sample of 125 owners or managers of micro, small and medium enterprises while further in-depth interviews were done to extract explanatory factors of capital investment decisions that were not accounted in the quantitative phase. Non-parametric test of association revealed no significant association of capital investment decisions and nature of industry being engaged by MSME owners/managers. Pearson r correlation test revealed that generation of investment opportunities, project analysis and approval, and post-implementation audit have significant relationship with years of operation. Further qualitative analysis of interviews revealed that the influential factors affecting financing decisions of MSME’s owners include sources of finances, entrepreneurs’ prior experiences, business trends, and diversification of investments.

Keywords: capital investment decision; MSME; sequential-explanatory design; Digos City; Philippines (search for similar items in EconPapers)
JEL-codes: D81 G31 L25 L26 M14 M2 M21 (search for similar items in EconPapers)
Date: 2016-07-12, Revised 2017-06-07
New Economics Papers: this item is included in nep-ent, nep-ppm, nep-sbm and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79574

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