Take Action

Home | Faculty & Research Overview | Research

Research Details

The Capital Budgeting Process, Incentives, and Information, Journal of Finance

Abstract

We study the capital allocation process within firms. Observed budgeting processes are explained as a response to decentralized information and incentive problems. It is shown that these imperfections can result in underinvestment when capital productivity is high and overinvestment when it is low. We also investigate how the budgeting process may be expected to vary with firm or division characteristics such as investment opportunities and the technology for information transfer.

Type

Article

Author(s)

Milton Harris, Artur Raviv

Date Published

1996

Citations

Harris, Milton, and Artur Raviv. 1996. The Capital Budgeting Process, Incentives, and Information. Journal of Finance. 51(4): 1136-1174.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action