Ho, S P and Liu, L Y (2003) How to evaluate and invest in emerging A/E/C technologies under uncertainty. Journal of Construction Engineering and Management, 129(1), pp. 16-24. ISSN 0733-9364
Abstract
Many emerging architectural/engineering/construction (A/E/C) technology investments are of strategic importance and may create future growth opportunities. Therefore, from the strategic perspective, management needs a better method that can quantify the strategic value of technology investment and suggest optimal investment strategies when the future is uncertain. This paper presents a quantitative valuation method based on modern option pricing theory for evaluating major investments in emerging A/E/C technologies. This framework considers specifically the technology investment risk and embedded managerial options. It further aligns the investment evaluation process with the financial market. The analysis may help A/E/C firms more accurately evaluate investments in emerging technologies, such as information technology and automation, and make strategic investment decisions under uncertainty.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction management; financial management; management methods; risk management; technology |
| Index terms: | investment strategy, information technology, valuation method, strategic investment, management method, pricing, financial management, option, automation, risk management, emerging technology |
| Subjects: | decision analysis, management, automation and robotics, real estate economics, innovation and technology management, financial and cost management, economic analysis, risk assessment, computing systems |
| Topics: | Urban Studies, Digital Applications, Business Strategy, Cost Management, Risk Management |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here