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has been cited by the following article:

• TITLE: Longitudinal Market Valuation of Unexpectedly Increased R&D Expenditure with the Real Option Logic

  AUTHORS: Hyeri Jung, Jaeho Lee

  KEYWORDS: R&D Valuation, Real Option, Technology Uncertainty

  JOURNAL NAME: Open Journal of Business and Management, Vol.9 No.5, September 28, 2021

  ABSTRACT: This paper examines how the real option value of R&D expenditure in financial market changes as time proceeds. It examines the relations between the R&D capital and the firm value for 4 years from the time a firm increases its R&D expenditure unexpectedly. The results show that the financial market evaluates the unexpected increased R&D with real option logic. We find that the financial market takes account of the market uncertainty and the technology uncertainty of R&D for the valuation of firms. These effects appear significantly right after the R&D capital increases unexpectedly. However, the lasting period of them is shorter than 1 year. The operational performance doesn’t have any relation with the firm value in our analysis.