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Keywords:

  • R&D investment;
  • real option value;
  • enterprise value;
  • market value;
  • Black–Scholes option model

ABSTRACT

In this study, we have tried to analyze the influence of research and development (R&D) investment on real option value (ROV), expended net present value (ENPV) and market value by analyzing R&D investment, ROV, ENPV and market value of different industry types from an ex post perspective. The results show that ENPV, which has been deduced by real option according to R&D investment, reflects market value well and possesses a strong correlation with R&D investment, ROV, ENPV and market value. This implies that our study result corresponds with existing theories. Copyright © 2013 John Wiley & Sons, Ltd.