| Abstract: | Several studies have emphasized the relationship between process and outcome in New Product Development (NPD). A key process which often appears to be performed less than satisfactorily in NPD is business and financial evaluation. This paper applies a capital budgeting perspective to NPD. It briefly explains “best practice” in project appraisal and suggests a link between the degree of capital budgeting “sophistication” and NPD performance. Evidence from a small sample of firms indicates that both size of capital budget and “sophistication” are significantly associated with ongoing success in NPD. |
