A Comparative Institutional Analysis of a Preference for Payback Period Method of Japanese Companies

Abstract

Capital budgeting is one of managerial accounting subjects in which we often see the gap between theory and practice. Above all, it has been discussed in plenty of papers why Japanese companies prefer payback period method despite of its flaws. In this paper, I reviewed how this preference had been materialized and studied its robustness we can see still now in fact-finding surveys by using comparative institutional analysis.