An Analysis of the Impact of Real Options on Taiwan IT Industries’ Strategic Investment Decisions

• Main Authors: Wei-Tzu Lin, 林韋慈
• Other Authors: Joseph Z. Shyu
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/44630218878757909160

碩士 === 國立交通大學 === 科技管理所 === 90 === The study attempts to systematically explore the determinants of decisions of strategic investment undertaken by high-tech companies. The theories of real options and involvement were used as analytical tools. Probit Regression Analysis was used for coefficient estimates. A general survey was conducted from the public firms in electronics and computer industries, of which 128 corporate long-term investment projects made by manufacturing companies during 1996-2000. The results show a high degree of consistency between theoretical predictions and regressional results. First, a firm would prefer to engage in a minority partnership strategy when the growth potential and the volatility of the industries are high. The results also reveal evidence that firms in a more competitive environment would prefer to use a preemptive acquisition. Second, a firm’s prior investment experience, scale and irreversible investments will significantly reduce the option value of the minority partnership strategy. Besides, a profitable firm would prefer to use a minority partnership strategy. Acquisition and minority partnership strategy are the two external means for pursuing firms’ growth. Acquisition has more control power over these strategic resources, higher equity involvement and the operation risk. Meanwhile, the minority partnership strategy offers a way for firms to defer their decisions until further information or lower risk is granted.