CAPTIVE FINANCE SUBSIDIARIES: OVERVIEW AND SYNTHESIS

A captive finance company is a wholly owned subsidiary whose primary business is to finance the sales of the parent's products and services. Despite the continued growth and long history of captive finance companies, the issue of the economic impact of forming a captive remains controversial. Some view captive finance subsidiaries as unnecessary structures that may actually reduce the value of the firm. Others hold that captives can produce benefits that will increase firm value. The primary purpose of this paper is to provide an overview of the finance academic literature and to suggest direction for future research.     

Postauditing capital assets and firm performance: An empirical investigation

The argument presented in this paper is that the adoption of sophisticated postaudit procedures should be associated with improved firm performance. Based on a matched-pair experimental design, utilizing the Wilcoxon matched-pairs signed-ranks test and a newly developed statistic to test for a change point, empirical evidence is provided to support this argument.     

A gentle approach to corporate change

For the past half decade a planning-forecasting nucleus has been operating at Bell Northern Research based on some of the newer ideas in these arts. Designed as a supplement to the normal corporate planning activities, this group's objective was to probe the future using only unusual, but logical techniques, to inject uncertainty, and to otherwise challenge the accepted assumptions about the corporate group's future. Success at this activity demanded research to discover the essence of the principles that lay beneath the corporation's business. Finally, techniques had to be developed to ensure the meaningful diffusion of this knowledge throughout the organization and its environment.