Adoption timing of technology innovative investment project in economic rents perspective

نویسندگان

  • Chung-Cheng Lee
  • Yi-Kai Chen
چکیده

A hi-tech firm can capture the economic rents (the above-normal return) if the position with strategic benefit of innovative activities has been implemented under uncertain technology development progress, uncertain market demand, and irreversible cost. An approach to evaluate the technology innovation project with the option pricing technique is proposed in this work, to simulate the uncertainty of the project using the volatility of the project value. We have considered that the expected economic rents induced by innovative technology usually declines over time and postpone for carrying out the innovative technology may erode the value of the project. The appropriate investment timing will make a substantial influence on the competitive advantage induced by innovative technology. The value of the technology innovation project as well as the optimal timing could be derived. Area/Track: Finance (Other Areas, as “capital budgeting decision analysis”)

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عنوان ژورنال:
  • IJISCM

دوره 4  شماره 

صفحات  -

تاریخ انتشار 2009