Authors: Wesley L. Harris; Jarunee Wonglimpiyarat
Addresses: Department of Aeronautics and Astronautics, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, Massachusetts 02139, USA ' Department of Aeronautics and Astronautics, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, Massachusetts 02139, USA
Abstract: This paper analyses strategic implications of using the financial models to evaluate research and development (R&D) project investments. It also discusses the challenges of intellectual property (IP) valuation. This paper reveals how conventional financial models fail to recognise the importance of strategic positioning since there are limits in terms of using the quantified approaches to measure R&D performance. From the technology management perspective, it is argued that financial models need to be reconciled with technology strategies since today's investments have linkages with firms' competitiveness in the long run.
Keywords: financial models; technology management; net present value; NPV; internal rate of return; IRR; Black-Scholes; capital asset pricing model; CAPM.
International Journal of Business Innovation and Research, 2020 Vol.23 No.3, pp.384 - 399
Received: 13 Jul 2018
Accepted: 06 Jun 2019
Published online: 08 Oct 2020 *