RT info:eu-repo/semantics/article
T1 Exercising a firm’s growth options: A portfolio approach
A1 Andrés Alonso, Pablo de
A1 Fuente Herrero, Gabriel de la
A1 Velasco González, María Del Pilar
K1 Opportunity exploitation
K1 Explotación de oportunidades
K1 Portfolio
K1 Investment strategy
K1 Investment strategies
K1 Estrategias de inversión
AB This paper investigates a firm’s decision to exercise its growth options within the current scope of business. We contend that the point at which a firm chooses whether or not to exercise such options depends on several strategic characteristics associated to its portfolio of businesses (i.e. level of diversification, average volatility of its current business, relatedness among them, and rivalry in its core business). Using a sample of U.S. companies from 1998 to 2013, we find evidence that a firm’s level of diversification and the volatility of its current business deter immediate growth option exercise. In contrast, relatedness and rivalry in its core business trigger growth options exercise. Our portfolio perspective differs from the bulk of the literature on real options, which evaluates each growth option exercise in isolation, and contributes to furthering knowledge on the drivers underlying a diversified firm's strategic investments.
PB Elsevier
SN 0148-2963
YR 2021
FD 2021
LK https://uvadoc.uva.es/handle/10324/47899
UL https://uvadoc.uva.es/handle/10324/47899
LA eng
NO Journal of Business Research, 2021, vol. 132. p. 571-585
NO Producción Científica
DS UVaDOC
RD 29-abr-2024