R&D Investment Decision On Emerging Technology
AbstractThe prosperity of emerging technology may be triggered by the occurrence of rare events, and once emerging technology booms, there may be an enormous market demand for it. This paper explores the firm's commercial and R&D investment decisions on emerging technology in real options framework. We think that, for the fear that a rare event which occurs prior to R&D success would trigger the emerging technology boom, the firm should carry out prospective R&D in the emerging technology innovation. So the impacts of the R&D hazard rate and the intensity of rare event arrival on the prospective R&D investment strategy are mainly addressed. There are two results. First, the firm is most likely to take the strategy at low, rather than high, probability of technological boom in market-driven innovation. Second, in technology-driven innovation, the huge potential profit of emerging technology in booming period can arouse more attention toward the firm. When the growth rate of profit flow in booming period rises to some degree, the firm may take this strategy unconditionally.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Journal of Information Technology and Decision Making.
Volume (Year): 10 (2011)
Issue (Month): 03 ()
Contact details of provider:
Web page: http://www.worldscinet.com/ijitdm/ijitdm.shtml
Find related papers by JEL classification:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim).
If references are entirely missing, you can add them using this form.