Technology Switch Option and the Market Value of the Firm: A Model and an Empirical Test
Oriani, Raffaele (2003) Technology Switch Option and the Market Value of the Firm: A Model and an Empirical Test. [Working Paper]. Social Science Electronic Pub. p. 32. SSRN Working Paper Series
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A correct assessment of the innovation activities is critical to firm performance. To this purpose, some authors have analyzed the relationship between innovation and firm's market value within a framework based on the real options theory. However, in these papers there is not an explicit modeling of the 'real options'. Our model of market value formally includes a technology switch option, which allows the firm to exchange one technology with another when it achieves a major innovation. The model also accounts for the stochastic nature of the innovation. We test the model on a panel of publicly traded British firms operating in different manufacturing industries. The results provide support to the claim that the stock market recognizes and evaluates a technology switch option.
| Item Type: | Report / Paper (Working Paper) |
|---|---|
| Research documents and activity classification: | Working Papers > Non-Refereed Working Papers / of national relevance only |
| Divisions: | Department of Business and Management |
| Additional Information: | The paper has been published as: Raffaele Oriani (2007), Technology Switching Option and the Market Value of the Firm: A Model and an Empirical Test, in Professor Brian Silverman (ed.) Real Options Theory (Advances in Strategic Management, Volume 24), Emerald Group Publishing Limited, pp.429-458. |
| Uncontrolled Keywords: | Innovation, real options, market value |
| MIUR Scientific Area: | Area 09 - Industrial and Information Engineering > ING-IND/35 Engineering and Management |
| Deposited By: | Maria Teresa Nistico |
| Deposited On: | 10 Dec 2010 15:39 |
| Last Modified: | 10 Dec 2010 15:39 |
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- Technology Switching Option and the Market Value of the Firm: A Model and an Empirical Test. (deposited 24 Nov 2009 15:56)
- Technology Switch Option and the Market Value of the Firm: A Model and an Empirical Test. (deposited 10 Dec 2010 15:39) [Currently Displayed]
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