Capital Development in Thailand: Limitations and Misconceptions of Capital Budgeting Techniques
Kelly L. Williams
Middle Tennessee State University, USA
Volume 14: 2019, pp. 57-74; ABSTRACT
National growth depends on the efficient use of limited capital resources, especially in emerging economies. However, capital budgeting features many misconceptions and limitations, the misunderstanding of which can produce suboptimal capital budgeting decisions. This study compares Thai to U.S. students and practitioners in their understanding of several common capital budgeting misconceptions to identify significant areas of misunderstanding that educators in both countries can address in their classrooms. Three hundred and fifty-four respondents answered questions regarding types of capital budgeting methods and their understanding of their deficiencies. Chi-square analysis revealed significant differences according to education/practitioner status, gender, and age among the Thai respondents. A Student t-test analysis also revealed significant differences between the Thai respondents’ and U.S. accountants’ understanding of these limitations. These results indicate weaknesses in both Thai and U.S. accountants’ understanding of the dangers of evaluating capital budgeting analysis results that should be addressed by their respective educational systems.
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