Business Finance in Less Developed Capital Markets

By Klaus P. Fischer; George J. Papaioannou | Go to book overview

9
Financial Management and Goal Programming in Imperfect Capital Markets

EDGAR ORTIZ and GRACIELA BUENO

Financial management theory and tools have developed radically during the last three decades. The principles of finance have been mainly derived from studying the interrelationships between capital markets and the corporation and its environment. 1 Thus valuation and capital market indicators have become key variables for financial decision making for both private and public enterprises. Although full application of modern financial thought is far from being complete, corporations in most advanced countries have benefitted from these changes. Higher education, business training, and the presence of solid economies and nearly perfect markets, particularly securities markets, have contributed to a rather rapid and smooth transfering of know-how.

In the developing countries this is not the case. In addition to their own scientific developments and practices, a great deal of technological transfer has taken place from the most advanced to the less developed nations, in financial management as well as in other fields. Nevertheless, modern financial principles have been adopted in a limited way in corporate decisions. Often, financial managers in these nations choose outdated tools to solve their problems. They maintain that tools developed in the advanced nations are not relevant for their case due to market imperfections. Particularly, capital markets are thin and inefficient. There is a need to develop local administrative know-how based on serious research of local financial conditions. However, modern financial thought and theories can provide relevant principles and models to solve the problems related to financial decision making in the developing nations. Market imperfections should not constitute a barrier to rigorous decision making. Rather, financial principles derived under assumptions of perfect markets and perfect information should lead to a better understanding of the financial problems facing corporations in the developing countries. Although valuation might be imperfect, the goal remains maximizing the owners' wealth.

-173-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
Business Finance in Less Developed Capital Markets
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
/ 398

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.