Izvestiya of Saratov University.

Economics. Management. Law

ISSN 1994-2540 (Print)
ISSN 2542-1956 (Online)

For citation:

Firsova A. A. Main Characteristics of Real Options in the Implementation of Innovation Projects. Journal Izvestiya of Saratov University. Economics. Management. Law, 2018, vol. 18, iss. 2, pp. 162-168. DOI: 10.18500/1994-2540-2018-18-2-162-168

This is an open access article distributed under the terms of Creative Commons Attribution 4.0 International License (CC-BY 4.0).
Full text PDF(Ru):
(downloads: 0)
Article type: 

Main Characteristics of Real Options in the Implementation of Innovation Projects

Firsova Anna Alexandrovna, Saratov State University

Introduction. Insufficient funding for innovation in Russia focuses researchers’ attention on studying and developing both the institutional environment and tools for assessing the effectiveness and risk of innovative projects and optimizing their organization in modern conditions. Theoretical analysis. Existing approaches to assessing the effectiveness of innovative projects, comparing the discounted income and project costs, consider the portfolio of innovative projects of companies and investors as static and create a limited picture of investment opportunities. Most innovative projects contain real options. And management of the investment innovative project should use the special methods that allow to take into account these circumstances. Empirical analysis. When using the real options method in assessing the effectiveness of innovative projects, it is necessary to take into account the following key parameters that affect the results and costs of the innovation project: the uncertainty of future income streams, the costs of owning and realizing options for the project, the present value of the future revenue stream, expected commercial value of the project, the cost of additional investments arising from additional development of project implementation scenarios, one hundred ka discounting taking into account the risk premium, the time period until the option is exercised and other conditions of exercise. Results. Accounting for the main characteristics of options for a more accurate multi-pricing of innovative projects compared with existing approaches based on the application of the real option method in the practice of investment project analysis will help to increase the accuracy of estimates and justify the feasibility of investors’ participation in the implementation of innovative projects. 

  1. Firsova A. A. Features of investment for innovation in the Russian economy. Innovatsionnaia deiatel’nost’ [Innovative activity], 2010, no. 3 (12), pp. 34–40 (in Russian). 
  2. Demodoran A. Investitsionnaia otsenka. Instrumenty i tekhnika otsenki liubykh aktivov [Investment valuation. Tools and techniques for assessing any assets. Transl. of Engl.]. Moscow, Alpina Business Books Publ., 2004. 1342 p. (in Russian). 
  3. Myers St. 1977. Determinants of corporate borrowing. Journal of Financial Economics, 1977, no. 5, pp. 147–175. 
  4. Trigeorgis L. Real Options and Interactions with Financial Flexibility. Financial Management, 1993, no. 22 (3), рр. 202–224.
  5. Rosh J. Stoimost’kompaniy: Ot zhelaemogo k deystvitel’nomu [The value of the company: From the desired to the real]. Minsk, Grevtsov Publ., 2008. 352 p. (in Russian). 
  6. Limitovsky M. A. Investitsionnye proekty i real’nye optsiony na razvivaiushikhsia rynkakh [Investment projects and real options in emerging markets]. Moscow, Yurayt Publ., 2008. 464 p. (in Russian). 
  7. Bukhvalov A. V. Real real options. Rossiiskii zhurnal menedzhmenta [Russian Journal of Management], 2006, no. 3, pp. 77–84 (in Russian).
Available online: