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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