Real options theory: Implications on entrepreneurship development and options value under uncertainty (Korea).

摘要

This study uses real options theory to explain macro environmental changes and its impact on entrepreneurship development and value of the firms. Composed of three related topics, this study first theoretically examines how bankruptcy policy can facilitate entrepreneurship development. Second, using Korean economic crisis as a context for environmental shifts, this study tests various real options investments and their value in uncertain environment. Third, using the same context of Korean economic crisis, this study also specifically examines international investments and its value in uncertain environments. To be more specific, first this study extends the real options view from the firm level to the societal level, by exploring how bankruptcy policy facilitates entrepreneurship development. Bankruptcy policy can focus on generating positive externalities, as opposed to avoiding failure for individual firms. Treating the bundle of productive assets within a country as entrepreneurial options, bankruptcy policy concentrated on maximizing the variance of such a bundle would facilitate entrepreneurship development. Second, according to real options theory, real options investments are expected to take their greatest value during periods of abnormally high uncertainty. Yet, this important proposition of real options is empirically difficult to test, since one cannot readily find such well-defined unanticipated periods affecting large numbers of firms. This study attempts to address this problem in the real options literature in this research by focusing on the case of Korean firms during the recent Korean economic crisis in 1998. The largely unanticipated nature of this Korean economic crisis, along with its highly uncertain implications, created the conditions of a “natural experiment” for investigating this issue. The findings support the notion that real options investments provide value both in themselves and relative to those investments made by peers within their industry. We also find support for the notion that the value of real options varies with the level of uncertainty faced by the firm. Third, not only investments in a domestic context, but also international investments provide firms with important real options that allow them to gain strategic flexibility during periods of uncertainty. While firms' international investments include those relating to exporting capability as well as foreign productive capability (i.e., FDI), prior empirical work has focused overwhelmingly on only FDI. We find evidence that firms' value during the crisis were consistent with the differential real options value of a priori export and FDI investments made by these firms. We further find important differences in the real options value of such investments made by firms imbedded in a closed network and those in embedded in an open network.