Capital budgeting and delegation

• 成果类型: Article
• 署名作者: Harris, M; Raviv, A
• 署名单位: University of Chicago; Northwestern University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(98)00038-5
• 发表日期: 1998
• 页码: 259-289
• 关键词: Capital budgeting; DELEGATION; budget rollovers

摘要

As part of our ongoing research into capital budgeting processes as responses to decentralized information and incentive problems, we focus in this paper on when a level of a managerial hierarchy will delegate the allocation of capital across projects and time to the level below it. In our model, delegation is a way to save on costly investigation of proposed projects. Therefore, it is more extensive the larger are the costs of such investigations. This delegation takes advantage of the fact that the lower-level manager's preferences are assumed to be similar (though not identical) to those of the higher level. (C) 1998 Elsevier Science S.A. All rights reserved. JEL classification: G31.