The choice of capital budgeting techniques
: a human capital approach

  • Victoria Levin
  • Anna Hallgren

    Student thesis: Bachelor


    Previous research has identified a gap between theory and how companies actually use capital budgeting techniques in practice. Research highlights that the gap is particularly large among SMEs, as they tend to use simpler capital budgeting techniques. By trying to explain the phenomenon of the theory-practice gap, researchers have reflected on underlying factors that influence the choice of capital budgeting techniques in SMEs. An underlying factor, that influences the choice of capital budgeting techniques, is on the individual level in terms of educational degree and occupational level of experience. The aim of this thesis is therefore to increase the understanding of how the human capital influences the choice of capital budgeting techniques in Swedish SMEs. To examine the aim of the study, a quantitative method is used by a web-based survey. Furthermore, the study is based on a positivism research philosophy that evolve from a deductive research method in order to draw general conclusions. The result of the study is based on 56 responses from decision makers for strategic investments in Swedish SMEs, where the results are illustrated using statistical analysis methods. The results and conclusions of the study shows that decision makers in Swedish SMEs with higher degree of education or higher level of occupational experience increase the use of more advanced capital budgeting techniques. However, the results do not support that decision makers in Swedish SMEs with a lower degree of education or lower level of occupational experience use more simple capital budgeting techniques.

    Date of Award2017-Jun-20
    Original languageSwedish
    SupervisorZahida Sarwary (Supervisor), Sven-Olof Yrjö Collin (Examiner) & Timurs Umans (Examiner)

    Educational program

    • Degree of Bachelor of Science in Business and Economics

    Courses and Subjects

    • Företagsekonomi

    University credits

    • 15 HE credits

    Swedish Standard Keywords

    • Business Administration (50202)


    • smes
    • strategic investments
    • capital budgeting
    • human capital
    • advanced capital budgeting techniques
    • simple capital budgeting techniques
    • education degree
    • occupational level of experience

    Cite this