Research On The Decision Methods Of Technical Innovation Investment Project Investment Based On Real Options

Technology innovation is an important means to enhance competitive power and sustainable development of enterprises, and also is the impetus of national economic growth. Thus, it is very important that whether the technology innovation investment is successful or not. Traditional investment decision methods cannot properly deal with the uncertainty, irreversibility and competition of technology innovation investment, and thus lead to ernor decisions. The real options theory and methodology can bring the uncertainty, irreversibility and competition to one analytical framework to evaluate project and make decision, which overcomes the limitaions and shortcomings. So, it is a more scientific modem investment decision-making method. On the basis of the summarization of frontier theories and advanced knowledge such as finance engineering and game theory, the evaluation and decision making of technology innovation project is researched. The main innovations and contents that are researched in the paper are listed as follows:(1) The meaning and characteristics of technology innovation project are analyzed; the similarities and differences among traditional investment decision tools and real options are discussed comparatively. The superiority of real options is expounded. The real option natures of technology innovation project are identitied from the aspects of ownership, repitious and timeliness respectly. Based on the three natures, the technology innovation projects are classified as the repitious technology innovation projects, the distruptive technology innovation projects and competitive technology innovation projects in the paper. The project investment decisions are researched, a decision-making framework of technology innovation project investment is established based on real options.(2) Under the long-enduring technical innovation environment, enterprise's technology innovation investment also has the long-enduring characteristic. The enterprise needs plan, organize and control technology innovation flows dynamicly and systemly. The repitious technology innovation projects playan important platform role in the process of enterprise of technology innovation. In the paper, the enterprise's technical innovation investment is regarded as a sequence investment question with more than one stages, a repetitious real option model is proposed for the project appraisal and decision-making. For the persperctive of repetitious real options, the investment value of repitious technology innovation projects should be composed with the net investment cashflow, real option value and future option value. With the future option value and numerous studies, the implementation time of investment will be advanced, and the empirical study certified the conculsion that enterprises will accelerate the pace of technology innovation investment.(3) Technology innovation shows new distructive characters. In the paper, the new breakthrough characters are linked with the repitious technology innovation platform. On the base of relative uniformity of repitious and distructivty features, the success of distructive technology innovation projects can be same as a leap in the real option chain. An investment decision-making model is established for distructive technology innovation projects, and the investment decision-making features of distructive technology innovation project are researched. The investment value and decision of distructive technology innovation projects will vary with the direction of value jumping. When the values of distructive technology innovation develop negative, the investment threshold will decrease with the increasement of frequency of technology innovation, and vice versa.(4) Based on the option game theory, the option game model is established, the investment strategy of two-assymetrical monopolizesl is analyzed. Under the competition situation, the enterprise has limite investment flexibiligy, as a result of fear competitor preemption; the enterprise will make investment decision equilibrim between the strategic value from the eompetitor's behavior and the real option value from uncertainty, and chooses the optimal investment opportunity. Compares with the monopoly situation, the common enterprise can shift to an earlier investment time. The situation that enterprises usually have early investment in monopolizes compared with the total monopoly was certified by empirical studies.