CAPITAL INVESTMENT DECISIONS IN SMALL AND MEDIUM SIZED ENTERPRISES IN TURKEY (Published)
As accepted by economists, Small and Medium Sized Companies (SMEs) are very important for Turkish economy from various points of view. Professional management is becoming very popular in Turkish SMEs and family owned and managed companies began to realize the advantages of institutionalization and professionalization for sustainable growth and achievement. In line with this trend, this study researches how investment decisions are being made in SMEs in Turkey and to get insight as to the level of professionalism and utilization of financial tools and techniques for this purpose. With the objective of exploring how capital investment decisions are made in SMEs in Turkey, a survey was conducted among 65 SMEs located in Istanbul from production, construction and service industries. The main conclusion is that despite awareness on theoretically superior generally accepted evaluation measures, they are not used by the vast majority of the decision makers in the analysis of capital investments in SMEs in Turkey. By analyzing and outlining the As-is situation, this study aims to contribute to increase the awareness level; thus, motivate decision makers to interrogate and challenge the current situation in order to set up appropriate policies and action plans at both macro and micro levels.
Keywords: Capital budgeting, Investment decisions, NPV, Payback, SMEs