Strategic Alliance for R&D Projects

Abstract

It is said that alliance for R&D investment is more difficult to evaluate since this kind of investment has more uncertain factors than other ones. In order to develop an evaluation method for such investment, there is a research field that applies real options to an evaluation method for such investment. Among literature on this issue, the study by Smit & Trigeorgis (2004) is well known as a representative one because they quantitatively evaluate how each uncertain factor influences. With a premise different from that of Smit & Trigeorgis (2004), we experiment how alliance influences on R&D investment. This paper reports the result of our experiment, and discusses the validity of our experiment and the availability of real options.