SHIFT IN THE FUNDING THEORY PARADIGM: FROM NEWTONIAN-POSITIVISTIC TO CRITICAL-PHENOMENOLOGY
RIO RITA, MARIA
HERU PRIYANTO, SONY
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Theories about funding have developed rapidly, starting from the traditional-rational theory to the behavior-based funding theory, which responds to the gap between the reality and financial theories. The theoretical developments can depict the real condition about financial management involving funding decisions, investment decisions, and dividend policies in an enterprise. These developments and evolution enable entrepreneurs and financial managers to realistically apply them in their business activities. There has already been a shift in the funding theory paradigm from a Newtonian paradigm which emphasizes positivistic epistemology leading to a Critical paradigm, which places more emphasis on a phenomenological approach to see the reality. This shift has resulted in many changes related to the financial essence, research related to finance, as well as the advantages of the funding theory in a company. A new essence about funding has surfaced, where funding and its benefits can solve company funding problems.