A research study submitted in partial fulfilment of the requirements for the degree of Master of Business Administration, School of Management

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1998

The study attempted to find out the capital budgeting practices of different companies in the chemical process industry. Thereby, it also tried to make a comparative analysis of the different practices between companies from the developing countries and that from the developed world. Three in-depth case-studies were done about three companies in India, Thailand and France. Studies were made about the investment appraisal practices in several other companies from India and Germany. The information available was analysed in the light of a conceptual framework developed on previous findings and literature survey. It was found that almost all the companies adopted to theoretically unsound practices in some way or the other, with companies from developing countries showing more of this symptom. However, the marked differences existing between the capital budgeting practices between these two economies, as pointed out by earlier studies, is gradually narrowing down. Companies in India and Thailand are in the way of remarkable changes in adopting to standard financial management practices. A model has been prepared which points out the critical aspects of a standard capital budgeting procedure based on the findings of the study.