Theory versus practice: Perspectives of Middle Eastern financial managers

Abdelaziz Chazi, Paulo Renato Soares Terra, Fernando Caputo Zanella

    Research output: Contribution to journalArticlepeer-review

    17 Citations (Scopus)


    Purpose: The purpose of this paper is to survey financial managers in the Arab Gulf region about a broad set of financial decisions and contrast their answers with both prescriptions of financial theory and practices of their North American and European peers. Design/methodology/approach: The paper uses Graham and Harvey's questionnaire on the cost of capital, capital budgeting and capital structure that is also employed by Brounen et al. in Europe, containing two additional questions on corporate governance. Moreover, the survey included an additional question about Islamic financial instruments. Findings: Despite each firm's unique characteristics and institutions, chief financial officers (CFOs) in the Middle East are acting in a manner similar to their North American and European counterparts. Originality/value: All CFOs surveyed are located in countries that abide by a combination of Islamic, civil (French, Romano-Germanic), and common (Anglo-Saxon) laws. To the best of the authors' knowledge, this is the first time that a nearly identical corporate finance survey has been simultaneously administered in North America, Europe and the Arab Gulf region.

    Original languageEnglish
    Pages (from-to)195-221
    Number of pages27
    JournalEuropean Business Review
    Issue number2
    Publication statusPublished - 2010


    • Corporate finances
    • Financial management
    • Middle East

    ASJC Scopus subject areas

    • Business and International Management
    • Business, Management and Accounting (miscellaneous)


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