Intellectual capital and real options: agency theory and the dynamics of R&D investments

Andreas Andrikopoulos

International Journal of Learning and Intellectual Capital, 2008, vol. 5, issue 1, 20-32

Abstract: The real-options approach to R&D investment can be expanded through the integration of explicit modelling for knowledge value dynamics as well as agency-theoretic analysis. Our objective is to combine the market-related dynamics of the demand for R&D products with the firm-specific organisational dynamics of knowledge accumulation and value creation through knowledge. This objective is accomplished using the partially complete markets framework in real options. We introduce the knowledge-related significance of option-pricing parameters and show how these parameters affect investment policies and agency conflicts in R&D and intellectual capital decision making.

Keywords: real options; intellectual capital; agency theory; R&D investment; research and development; modelling; knowledge accumulation; value creation; knowledge value dynamics; organisational dynamics; option pricing; investment policies; agency conflicts. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijlica:v:5:y:2008:i:1:p:20-32

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