How Do Real Options Matter? Empirical Research on Strategic Investments and Firm Performance

Advances in Strategic Management

Volumn 24, Issue , 2007, Pages 145-173

  Reuer, Jeffrey J ^a   Tong, Tony W ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 34250204077     PISSN: 07423322     EISSN: None     Source Type: Book Series    
DOI: 10.1016/S0742-3322(07)24005-7     Document Type: Review

References (74)

1. Abel A.B., Dixit A.K., Eberly J.C., and Pindyck R.S. Options, the value of capital, and investment. Quarterly Journal of Economics 111 (1996) 753-777
2. Adner R. Real options and resource reallocation processes. Advances in Strategic Management 24 (2007) 363-372
3. Adner R., and Levinthal D. What is not a real option: Considering boundaries for the application of real options to business strategy. Academy of Management Review 29 (2004) 74-85
4. Akerlof G.A. The market for 'Lemons': Quality uncertainty and the market mechanism. Quarterly Journal of Economics 84 (1970) 488-500
5. Allen L., and Pantzalis C. Valuation of the operating flexibility of multinational corporations. Journal of International Business Studies 27 (1996) 633-653
6. Amram M., and Kulatilaka N. Real options: Managing strategic investment in an uncertain world (1999), Harvard Business School Press, Boston, MA
7. Anand J., Oriani R., and Vassolo R.S. Managing a portfolio of real options. Advances in Strategic Management 24 (2007) 275-303
8. D'Aveni R.A., and Illinitch A.Y. Complex patterns of vertical integration in the forest products industry: Systematic and bankruptcy risks. Academy of Management Journal 35 (1992) 596-625
9. Berger P.G., Ofek E., and Swary I. Investor valuation of the abandonment option. Journal of Financial Economics 42 (1996) 257-287
10. Berk J.B., Green R.C., and Naik V. Optimal investment, growth options, and security returns. Journal of Finance 54 (1999) 1553-1607
11. Bowman E.H., and Hurry D. Strategy through the options lens: An integrated view of resource investments and the incremental-choice process. Academy of Management Review 18 (1993) 760-782
12. Bowman E.H., and Moskowitz G.T. Real options analysis and strategic decision making. Organization Science 12 (2001) 772-777
13. Busby J.S., and Pitts C.G.C. Real options in practice: An exploratory study of how finance officers deal with flexibility in capital appraisal. Management Accounting Research 8 (1997) 169-186
14. Caves R.E. Multinational enterprise and economic analysis. 2nd ed. (1996), Cambridge University Press, New York
15. Chi T. Option to acquire or divest a joint venture. Strategic Management Journal 21 (2000) 665-687
16. Chi T., and Levitas E. An examination of options embedded in a firm's patents: The value of dispersion in citations. Advances in Strategic Management 24 (2007) 405-427
17. Chi T., and McGuire D.J. Collaborative ventures and value of learning: Integrating the transaction cost and strategic option perspectives on foreign market entry. Journal of International Business Studies 27 (1996) 285-308
18. Coff R.W., and Laverty K.J. Real options meet organizational theory: Coping with path dependencies, agency costs, and organizational form. Advances in Strategic Management 24 (2007) 333-361
19. Copeland T.E., and Antikarov V. Real options: meeting the Georgetown challenge. Journal of Applied Corporate Finance 17 (2005) 32-51
20. Cuypers I.R.P., and Martin X. Joint ventures and real options: An integrated perspective. Advances in Strategic Management 24 (2007) 103-144
21. Dixit A.K., and Pindyck R.S. Investment under uncertainty (1994), Princeton University Press, Princeton, NJ
22. Folta T.B. Governance and uncertainty: The tradeoff between administrative control and commitment. Strategic Management Journal 19 (1998) 1007-1028
23. Folta T.B., and Miller K.D. Real options and equity partnerships. Strategic Management Journal 23 (2002) 77-88
24. Folta T.B., and O'Brien J.P. Entry in the presence of dueling options. Strategic Management Journal 25 (2004) 121-138
25. Ghemawat, P., & del Sol, P. (1998). Commitment versus flexibility? California Management Review, 40(4), 26-41.
26. Harlow W.V. Asset allocation in a downside-risk framework. Financial Analysts Journal 47 5 (1991) 28-40
27. Hartmann M., and Hassan A. Application of real options analysis for pharmaceutical R&D project valuation - empirical results from a survey. Research Policy 35 (2006) 343-354
28. Ho Y.K., Tjahjapranata M., and Yap C.M. Size, leverage, concentration, and R&D investment in generating growth opportunities. Journal of Business 79 (2006) 851-876
29. Hoskisson R.E., Eden L., Lau C.M., and Wright M. Strategy in emerging economies. Academy of Management Journal 43 (2000) 249-267
30. Huchzermeier A., and Cohen M.A. Valuing operational flexibility under exchange rate risk. Operations Research 44 (1996) 100-113
31. Huchzermeier A., and Loch C.H. Project management under risk: Using the real options approach to evaluate flexibility in R&D. Management Science 47 (2001) 85-101
32. Hurry D., Miller A.T., and Bowman E.H. Calls on high-technology: Japanese exploration of venture capital investments in the United States. Strategic Management Journal 13 (1992) 85-101
33. Jorion P. The exchange rate exposure of U.S. multinationals. Journal of Business 63 (1990) 331-345
34. Kester W.C. Today's options for tomorrow's growth. Harvard Business Review 62 (1984) 153-160
35. Kogut B. A note on global strategies. Strategic Management Journal 10 (1989) 383-389
36. Kogut B. Joint ventures and the option to expand and acquire. Management Science 37 (1991) 19-33
37. Kogut B., and Kulatilaka N. Options thinking and platform investments: Investing in opportunity. California Management Review 36 (1994) 52-71
38. Kogut B., and Kulatilaka N. Operating flexibility, global manufacturing, and the option value of a multinational network. Management Science 40 (1994) 123-139
39. Kogut B., and Kulatilaka N. Capabilities as real options. Organization Science 12 (2001) 744-758
40. Kogut B., and Kulatilaka N. Real options pricing and organizations: The contingent risks of extended theoretical domains. Academy of Management Review 29 (2004) 102-110
41. Kulatilaka N., and Perotti E. Strategic growth options. Management Science 44 (1998) 1021-1031
42. Kumar M.V.S. The value from acquiring and divesting a joint venture: A real options approach. Strategic Management Journal 26 (2005) 321-331
43. Lander D.M., and Pinches G.E. Challenges to the practical implementation of modeling and valuing real options. Quarterly Review of Economics and Finance 38 (1998) 537-567
44. Lang L.H.P., Stulz R.M., and Walkling R.A. Tobin's Q and the gains from successful tender offers. Journal of Financial Economics 24 (1989) 137-154
45. Leiblein M.J., and Miller D.J. An empirical examination of transaction- and firm-level influences on the vertical boundaries of the firm. Strategic Management Journal 24 (2003) 839-859
46. Lev B. Intangibles: Management, measurement, and reporting (2001), Brookings Institution Press, Washington, DC
47. Lin L., and Kulatilaka N. Strategic growth options in network industries. Advances in Strategic Management 24 (2007) 177-198
48. Lindenberg E.B., and Ross S.A. Tobin's Q ratio and industrial organization. Journal of Business 54 (1981) 1-32
49. Marshall A. Principles of economics (1890), The Macmillan Press Ltd, New York
50. McGrath R.G. A real options logic for initiating technology positioning investments. Academy of Management Review 22 (1997) 974-996
51. McGrath R.G. Falling forward: Real options reasoning and entrepreneurial failure. Academy of Management Review 24 (1999) 13-30
52. McGrath R.G., Ferrier W.J., and Mendelow A. Real options as engines of choice and heterogeneity. Academy of Management Review 29 (2004) 86-101
53. McGrath R.G., and Nerkar A. Real options reasoning and a new look at the R&D investment strategies of pharmaceutical firms. Strategic Management Journal 25 (2004) 1-21
54. Miller K.D., and Reuer J.J. Measuring organizational downside risk. Strategic Management Journal 17 (1996) 671-691
55. Miller K.D., and Reuer J.J. Asymmetric corporate exposures to foreign exchange rate changes. Strategic Management Journal 19 (1998) 1183-1191
56. Miller K.D., and Reuer J.J. Firm strategy and economic exposure to foreign exchange rate movements. Journal of International Business Studies 29 (1998) 493-513
57. Miller K.D., and Shapira Z. An empirical test of heuristics and biases affecting real option valuation. Strategic Management Journal 25 (2004) 269-284
58. Miller M.H., and Modigliani F. Dividend policy, growth and the valuation of shares. Journal of Business 34 (1961) 411-433
59. Mitchell G.R., and Hamilton W.F. Managing R&D as a strategic option. Research-Technology Management 27 (1988) 789-798
60. Myers S.C. Determinants of corporate borrowing. Journal of Financial Economics 5 (1977) 147-175
61. Myers S.C. Finance theory and financial strategy. Interfaces 14 (1984) 126-137
62. Myers S.C. The capital structure puzzle. Journal of Finance 39 (1984) 575-592
63. Peng M.W. Business strategies in transition economies (2000), Sage, Thousand Oaks, CA
64. Reuer J.J., and Leiblein M.J. Downside risk implications of multinationality and international joint ventures. Academy of Management Journal 43 (2000) 203-214
65. Reuer, J. J., & Tong, T. W. (2007). Corporate investments and growth options. Managerial and Decision Economics, 28, forthcoming.
66. Smit H., and Trigeorgis L. Strategic investment: real options and games (2004), Princeton University Press, Princeton, NJ
67. Stewart G.B. The quest for value: A guide for senior managers (1991), Harper, New York
68. Tong T.W., and Reuer J.J. Firm and industry influence on the value of growth options. Strategic Organization 4 (2006) 71-96
69. Tong T.W., and Reuer J.J. Real options in multinational corporations: Organizational challenges and risk implications. Journal of International Business Studies 38 (2007) 213-230
70. Tong, T. W., Reuer, J. J., & Peng, M. W. (2007). International joint ventures and the value of growth options. Academy of Management Journal, 50, forthcoming.
71. Triantis A. Realizing the potential of real options: Does theory meet practice. Journal of Applied Corporate Finance 17 (2005) 8-16
72. Trigeorgis L. Real options: Managerial flexibility and strategy in resource allocation (1996), MIT Press, Cambridge, MA
73. Vassolo R.S., Anand J., and Folta T.B. Non-additivity in portfolios of expansion options: A real-options based analysis of equity alliances in biotechnology. Strategic Management Journal 25 (2004) 1045-1061
74. Young S.D., and O'Byrne S.F. EVA and value-based management (2001), McGraw Hill, New York