Title: The corporate investment decision process and control systems

Authors: Ghazi Zouari

Addresses: Faculty of Economic Sciences and Management, University of Sfax, Airport Road km 4, P.B. 1088, 3018 Sfax, Tunisia

Abstract: The objective of this research is to strengthen the relevance of the theoretical corpus of Fama and Jensen (1983a, 1983b) and Jensen and Meckling (1992). To do so, we apply the theory of the organisational architecture to the investment process to understand its complexity and efficiency. We show that the role played by the nature of investment, evaluation and incentive systems in the creation of value goes through the establishment of a decentralised decisional structure. An empirical test was conducted on a sample of 63 Tunisian firms by using descriptive and explanatory analyses. The test validated the four hypotheses tested.

Keywords: corporate investment; decision rights; systems of control; organisational architecture theory; evaluation; incentive schemes; value creation; decentralised decision making; Tunisia; investment decisions.

DOI: 10.1504/IJEPEE.2011.038872

International Journal of Economic Policy in Emerging Economies, 2011 Vol.4 No.1, pp.20 - 53

Published online: 11 Jan 2015 *

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