Bridging the theory-practice gap in corporate finance: A survey of chief financial officers

Abstract

The primary objective of this article is to assess general research opinions, barriers to using sophisticated financial management decision-making techniques, and the understanding, utilization, and research preferences of practicing financial managers. Data is gathered through a mail survey of the CFOs of the Fortune 500 largest industrial companies and Forbes 200 best small companies. Overall the respondents appear to have little interest in the current state of academic research in corporate finance and in utilizing finance professors as paid or unpaid internal consultants. They do express a desire to know more about many financial decision methods, suggesting that existing academic research can be better explained and operationalized. There is also some indication that new academic research is desired in some areas. There is a need for more dialogue between finance practitioners and academics to establish how communications with practitioners can be improved and to assess how practitioners might effectively learn more about financial decision methods that they deem important. Economic necessity and the increased competition for resources in academia provide an incentive for academic institutions and finance professors to become more responsive to the specific research preferences of practitioners.