Abstract

The objective of this paper is to develop the model that can be used to explain the amount of research and development (R&D) expenditures of large and mature companies. The re-search methodology is based on real options approach. We model companies’ R&D expen-ditures as payments for the real option, which is the right of a company to invest in real assets in the future, and therefore to ensure business development. The main result is a valuation model, which includes several relevant factors. While existing research papers apply real options approach mostly to the R&D projects of particular companies or within particular industries and situations, the current paper applies the corresponding methodol-ogy in general and aggregated setting. We hope that it will contribute to understanding of R&D intensity in large innovative companies.
Original languageEnglish
Pages (from-to)393-406
Number of pages14
JournalРОССИЙСКИЙ ЖУРНАЛ МЕНЕДЖМЕНТА
Volume16
Issue number3
Publication statusPublished - 2018

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Expenditure
Real options
Industry
Payment
Assets
R&D expenditure
Business development
Factors
Methodology
Valuation model

Cite this

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title = "A real options model for analysis of industrial R&D expenditures",
abstract = "The objective of this paper is to develop the model that can be used to explain the amount of research and development (R&D) expenditures of large and mature companies. The re-search methodology is based on real options approach. We model companies’ R&D expen-ditures as payments for the real option, which is the right of a company to invest in real assets in the future, and therefore to ensure business development. The main result is a valuation model, which includes several relevant factors. While existing research papers apply real options approach mostly to the R&D projects of particular companies or within particular industries and situations, the current paper applies the corresponding methodol-ogy in general and aggregated setting. We hope that it will contribute to understanding of R&D intensity in large innovative companies.",
keywords = "R&D expenditures, R&D projects portfolio, real option approach, volatility of company value, WEB OF SCIENCE, РОССИЙСКИЙ ИНДЕКС НАУЧНОГО ЦИТИРОВАНИЯ, затраты на исследования и разработки, портфель исследовательских проектов, реальные опционы, волатильность ценности компании, WEB OF SCIENCE, РОССИЙСКИЙ ИНДЕКС НАУЧНОГО ЦИТИРОВАНИЯ",
author = "Бухвалов, {Александр Васильевич} and Лукьянова, {Анна Евгеньевна} and Никулин, {Егор Дмитриевич} and Окулов, {Виталий Леонидович}",
note = "A real options model for analysis of industrial R&D expenditures / A. V. Bukhvalov, A. E. Loukianova, E. D. Nikulin, V. l. Okulov // The Russian Management Journal. - 2018. - Volume 16, № 3. - P. 393-406.",
year = "2018",
language = "English",
volume = "16",
pages = "393--406",
journal = "РОССИЙСКИЙ ЖУРНАЛ МЕНЕДЖМЕНТА",
issn = "1729-7427",
publisher = "Издательство Санкт-Петербургского университета",
number = "3",

}

TY - JOUR

T1 - A real options model for analysis of industrial R&D expenditures

AU - Бухвалов, Александр Васильевич

AU - Лукьянова, Анна Евгеньевна

AU - Никулин, Егор Дмитриевич

AU - Окулов, Виталий Леонидович

N1 - A real options model for analysis of industrial R&D expenditures / A. V. Bukhvalov, A. E. Loukianova, E. D. Nikulin, V. l. Okulov // The Russian Management Journal. - 2018. - Volume 16, № 3. - P. 393-406.

PY - 2018

Y1 - 2018

N2 - The objective of this paper is to develop the model that can be used to explain the amount of research and development (R&D) expenditures of large and mature companies. The re-search methodology is based on real options approach. We model companies’ R&D expen-ditures as payments for the real option, which is the right of a company to invest in real assets in the future, and therefore to ensure business development. The main result is a valuation model, which includes several relevant factors. While existing research papers apply real options approach mostly to the R&D projects of particular companies or within particular industries and situations, the current paper applies the corresponding methodol-ogy in general and aggregated setting. We hope that it will contribute to understanding of R&D intensity in large innovative companies.

AB - The objective of this paper is to develop the model that can be used to explain the amount of research and development (R&D) expenditures of large and mature companies. The re-search methodology is based on real options approach. We model companies’ R&D expen-ditures as payments for the real option, which is the right of a company to invest in real assets in the future, and therefore to ensure business development. The main result is a valuation model, which includes several relevant factors. While existing research papers apply real options approach mostly to the R&D projects of particular companies or within particular industries and situations, the current paper applies the corresponding methodol-ogy in general and aggregated setting. We hope that it will contribute to understanding of R&D intensity in large innovative companies.

KW - R&D expenditures

KW - R&D projects portfolio

KW - real option approach

KW - volatility of company value

KW - WEB OF SCIENCE

KW - РОССИЙСКИЙ ИНДЕКС НАУЧНОГО ЦИТИРОВАНИЯ

KW - затраты на исследования и разработки

KW - портфель исследовательских проектов

KW - реальные опционы

KW - волатильность ценности компании

KW - WEB OF SCIENCE

KW - РОССИЙСКИЙ ИНДЕКС НАУЧНОГО ЦИТИРОВАНИЯ

M3 - Article

VL - 16

SP - 393

EP - 406

JO - РОССИЙСКИЙ ЖУРНАЛ МЕНЕДЖМЕНТА

JF - РОССИЙСКИЙ ЖУРНАЛ МЕНЕДЖМЕНТА

SN - 1729-7427

IS - 3

ER -