The Cost of Financing to the Firm in Foreign Exchange: Some Empirical Results and Implications

Abstract

This paper tries to fill one of many observable gaps in operationally oriented research. The author sees his role as one of a mediator between theorists and practitioners: The merits of theories as such are not called into question, but they must deliver decision rules that are both practically applicable and functionally good. If theories cannot do this job, they are not yet useful to business, and other decision rules, whether backed by theory or not, must be developed or looked for. While theories without operational decision rules are not rejected by research into these mechanisms, they are rejected as the origin of acceptable decision rules. The criteria for rejection are therefore not necessarily those drawn from the current state of the art of methodology. This paper attempts to make this point clear through a rather simplistic research example.