Perspectives of Middle Eastern Financial Managers
The article “Theory Versus Practice: Perspectives of Middle Eastern Financial Managers” by Abdelaziz et al. 2010 studies the Arab Gulf area financial managers about a comprehensive set of monetary decisions. Still, the article examines the opinions of financial analysts with both financial theory prescriptions, North American practices, and European peers. The piece uses Harvey’s and Graham’s questionnaire on capital costs, capital planning, and capital building. Capital growth is correspondingly hired by Brounen et al. in Europe, comprising two additional inquiries on corporate supremacy. Furthermore, the survey encompassed an extra inquiry concerning Islamic financial tools.
Abdelaziz et al. 2010 found out that despite each company’s unique features and organizations, the Middle East chief financial officers (CFOs) are behaving in a way similar to their European and North American complements. All CFOs gauged are situated in nations that stand by a mixture of civil (Romano-Germanic, French), Islamic, and mutual (Anglo-Saxon) rules. Middle Eastern companies, on regular, finance total assets worth 20% with long-term obligations, as divergent to 30 percent average in the USA. As Harvey and Graham’s results were indecisive, the authors never formulated results related to the trade-off philosophies or the information irregularity pecking order.
The consequences offer mixed sustenance about the theory that clarifies the Middle East debt ratio better. The outcomes also were disastrous in delivering provision to the market-timing concept that posits money structure is purely an accretion of past efforts to spell the fairness shop. According to Harvey and Graham (2001), the comparatively low sustenance for these investment structure concepts designates there is also a delinquent with the schemes or that physicians are disregarding them. The authors concluded that the cause of these inconsistencies might be that there is no theory good enough, and these models correspond rather than contending.
Chazi, A., Renato Soares Terra, P., & Caputo Zanella, F. (2010). Theory versus practice: perspectives of Middle Eastern financial managers. European Business Review, 22(2), 195–221. Web.