A grounded theory exploration of appraisal Process of Capital Investment Decisions — Capex Appraisal Model (CAM)

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Umair Baig
Manzoor Ahmed Khalidi


The purpose of this study was to explore the appraisal process of capital investment decisions. The study adopted the grounded theory approach for the exploration of the objective. In the first stage, 48 in-depth interviews were conducted from finance executives of PSX listed companies. After transcription of all of the interviews, NVIVO software was used for analysis. Theoretical sampling was used in this study. Initially, 35 concepts and 19 categories were obtained from the initial coding of 48 cases. In the next stage, using focused coding, 19 initial categories into 09 categories were classified. These 09 categories represent each stage of the appraisal process of capital investment. These stages are Idea generation, Strategic planning, Analysis, Risk Evaluation, Selection, Mode of finance, Implementation, Monitoring and control, and Post-audit. The development of appraisal process stages is the novelty of this study and key theoretical contribution. Findings provide an in-depth understanding of the systematic way that industry appraises capital investments. This study opens grounds for new knowledge for academia, adds to relevant literature and reduces the gap between the corporate world and academia.


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