IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v50y1999i3d10.1057_palgrave.jors.2600703.html
   My bibliography  Save this article

Valuation under technological change

Author

Listed:
  • J Boston

    (University of Plymouth)

  • J Pointon

    (University of Plymouth)

Abstract

This paper presents a valuation model, which includes the possibility of a future change in technology that affects in the short term the level of net cash flows receivable. The user can consider the effects of such a change on the flows, depending on whether the company is an innovator itself, or a follower of the innovations of others. The model is based upon a number of assumptions. The cash flows before the technological breakthrough follow a geometric Brownian motion. The breakthrough is modelled by a Poisson jump. For the innovator, cash flows are boosted, then decline through competition. By contrast, for the technological follower the breakthrough has an immediate depressing effect on cash flows, but subsequent cash flows rise and are modelled by an upward logistic curve.

Suggested Citation

  • J Boston & J Pointon, 1999. "Valuation under technological change," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 50(3), pages 255-261, March.
    • Handle: RePEc:pal:jorsoc:v:50:y:1999:i:3:d:10.1057_palgrave.jors.2600703
    DOI: 10.1057/palgrave.jors.2600703
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/palgrave.jors.2600703
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/palgrave.jors.2600703?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J Pointon & A El-Masry, 2007. "Competitive advantage and the cost of equity in international shipping," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(9), pages 1138-1145, September.
    2. G Angelou & A Economides, 2008. "A real options approach for prioritizing ICT business alternatives: a case study from broadband technology business field," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(10), pages 1340-1351, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:50:y:1999:i:3:d:10.1057_palgrave.jors.2600703. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.