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Research and development project selection in the public sector


  • Nicholas S. Vonortas

    (Economics and International Affairs, George Washington University)

  • Henry R. Hertzfeld

    (Center for International Science and Technology Policy and the Space Policy Institute, George Washington University)


This article argues for an innovative methodology to appraising (ex ante) longer-term strategic research and development (R&D) investments. This methodology reflects the inherent value of such R&D in terms of opening up opportunities (but not obligations) for investment in new technological areas with potentially substantial returns. Although corporate R&D managers and public administrators describe the merits of long-term research on these grounds, only recently has the qualitative argument been replaced by the foundations of a methodology capable of quantifying this inherent value of R&D. Such a methodology could also facilitate a transition toward the use of more appropriate discount rates other than the unvarying rates of traditional methodologies.

Suggested Citation

  • Nicholas S. Vonortas & Henry R. Hertzfeld, 1998. "Research and development project selection in the public sector," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 17(4), pages 621-638.
  • Handle: RePEc:wly:jpamgt:v:17:y:1998:i:4:p:621-638
    DOI: 10.1002/(SICI)1520-6688(199823)17:4<621::AID-PAM2>3.0.CO;2-I

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    References listed on IDEAS

    1. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    2. Tom K. Lee, 1982. "On the Reswitching Property of R&D," Management Science, INFORMS, vol. 28(8), pages 887-899, August.
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    Cited by:

    1. Maryann Feldman & Irwin Feller & Janet Bercovitz & Richard Burton, 2002. "Equity and the Technology Transfer Strategies of American Research Universities," Management Science, INFORMS, vol. 48(1), pages 105-121, January.
    2. S├ębastien Casault & Aard J. Groen & Jonathan D. Linton, 2013. "Selection of a portfolio of R&D projects," Chapters, in: Albert N. Link & Nicholas S. Vonortas (ed.),Handbook on the Theory and Practice of Program Evaluation, chapter 4, pages 89-111, Edward Elgar Publishing.

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