IDEAS home Printed from
   My bibliography  Save this book chapter

Longitudinal Market Valuation of Unexpectedly Increased R&D Expenditure with the Real Option Logic


  • Jaeho Lee

    (Kyung Hee University, South Korea)


This paper examines how the real option value of R&D expenditure in financial market changes as time proceeds. It examines the relations between the R&D capital and the firm value for 4 years from the time a firm increases its R&D expenditure unexpectedly. The results show that the financial market evaluates the unexpected increased R&D with real option logic. We find that the financial market takes account of the market uncertainty and the technology uncertainty of R&D for the valuation of firms. These effects appear significantly right after the R&D capital increased unexpectedly. However, the lasting period of them is shorter than 1 year. The operational performance doesn’t have any relation with the firm value in our analysis.

Suggested Citation

  • Jaeho Lee, 2013. "Longitudinal Market Valuation of Unexpectedly Increased R&D Expenditure with the Real Option Logic," Active Citizenship by Knowledge Management & Innovation: Proceedings of the Management, Knowledge and Learning International Conference 2013, ToKnowPress.
  • Handle: RePEc:tkp:mklp13:285-298

    Download full text from publisher

    File URL:
    File Function: full text
    Download Restriction: no

    File URL:
    File Function: Conference Programme
    Download Restriction: no


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tkp:mklp13:285-298. See general 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: (Alen Jezovnik). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.