A framework for applying real options analysis to information technology investments

2012 ◽  
Vol 10 (2) ◽  
pp. 217 ◽  
Author(s):  
Chris Wang Ngai Chan ◽  
Chun Hung Cheng ◽  
Angappa Gunasekaran ◽  
Kam Fai Wong
Keyword(s):  
Information Technology ◽  
Real Options ◽  
Real Options Analysis ◽  
Information Technology Investments ◽  
Technology Investments

The Valuation of Information Technology Investments by Real Options Analysis

2009 ◽  
Vol 12 (04) ◽  
pp. 611-628 ◽  
Author(s):  
Kuo-Jung Lee ◽  
David S. Shyu ◽  
Miao-Ling Dai
Keyword(s):  
Information Technology ◽  
Real Options ◽  
Cost Savings ◽  
Price Volatility ◽  
Closed Form Expression ◽  
Optimal Timing ◽  
Real Options Analysis ◽  
It Investments ◽  
Output Price ◽  
Information Technology Investments

This study establishes a dynamic model under real options analysis to analyze the optimal timing decision of information technology (IT) investments when the output price for firms is stochastic and benefits of IT investments are arisen from the increasing output price, increasing sale, and cost savings. We derive the closed form expression of the timing of IT investments and furthermore prove that IT investments rise at an increasing rate in economic booms and fall in economic busts. This study finds that increasing (decreasing) price volatility will delay (advance) the timing of IT investments. Increasing IT investments, however, may not delay the timing of IT investments. In addition, the decreasing (increasing) efficiency and increasing (decreasing) depreciation of IT investments will delay (advance) the timing of IT investments.

scholarly journals Examining Real Options Exercise Decisions in Information Technology Investments

2017 ◽  
Vol 18 (5) ◽  
pp. 372-402 ◽  
Author(s):  
Sarah Khan ◽  
◽  
Kexin Zhao ◽  
Ram Kumar ◽  
Antonis Stylianou ◽  
...  
Keyword(s):  
Information Technology ◽  
Real Options ◽  
Information Technology Investments ◽  
Technology Investments

Revisiting the Impact of Information Technology Investments on Productivity

2011 ◽  
pp. 296-322
Author(s):  
Myung Ko ◽  
Jan Guynes Clark ◽  
Daijin Ko
Keyword(s):  
Information Technology ◽  
Predictor Variable ◽  
Value Added ◽  
It Investments ◽  
Interaction Variable ◽  
Information Technology Investments ◽  
Technology Investments ◽  
The Impact ◽  
The Relationship

This article revisits the relationship between IT and productivity, and investigates the impact on information technology (IT) investments. Using the MARS techniques, we show that although IT Stock is the greatest predictor variable for productivity (Value Added), it is only significant as an interaction variable, combined with Non-IT Capital, Non-IT Labor, Industry, or Size.

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