Investment planning in some Swedish companies — Criteria and uses

Institutional barriers as well as cultural differences tend to make the application of the capital theory more difficult in Sweden than in the U.S. In this study the capital investment planning in six Swedish companies with different characteristics is analyzed. We could conclude that the variations in the lines of reasoning, as well as in the use of different criteria, differed considerably from the capital theory. A wide range of heuristics were used which emanated from different lines of thought. A tentative typology of the use of criteria is formulated. We observed and analyzed some dysfunctional effects in the use of certain heuristics reducing the propensity to invest. Furthermore, these heuristics seem to create norms prescribed in handbooks of investments and are used regardless of the economic conditions.