Using Real Options for the Evaluation of Venture Projects

Alexander  Baranov; Elena  Muzyko

Alexander Baranov Novosibirsk National Research State University
Elena Muzyko Novosibirsk National Research State University

Keywords: Real Options, Venture Projects

Abstract

This paper considers the peculiarities of the application of the real options method for assessing the economic efficiency of venture investments in innovative projects from the venture fund’s position. The results of the practical use of the author’s approach for the evaluation of venture investments with real options are analyzed. The paper shows the applicability of the real options concept to the valuation of the effectiveness of venture capital investments. The use of the real options method raises the accuracy of the estimation and enhances the instruments of the venture fund in evaluating the economic efficiency of innovative projects.

Author Biographies

Alexander Baranov, Novosibirsk National Research State University

BARANOV, Alexander is a Professor, Head of Economic Theory Chair of Novosibirsk National Research State University; leading scientific researcher of Institute of Economics and Industrial Engineering, Siberian Branch of Russian Academy of Sciences. He earned his Ph.D. degree (2004) in Economics from Institute of Economics and Industrial Engineering, Siberian Branch of Russian Academy of Sciences; Master degree (1986) in Economics from Institute of Economics and Industrial Engineering, Siberian Branch of Russian Academy of Sciences, and his Bachelor degree (1977) in Economics from Novosibirsk National Research State University. His expertise areas are economics and finance. His publications: (1) Baranov A.O., I. A. Somova (2015), Analysis of main factors of inflation dynamics in post-soviet Russia, in Studies on Russian Economic Development 26 (2), pp. 110 – 123; (2) Baranov A.O, Muzyko E.I., Pavlov V. N. (2015), The use of fuzzy sets analysis for assessment of efficiency of innovative projects with venture financing based on real options method, in Siberian Financial School (No. 4), pp. 90–96; (3) Baranov A. O. (2014), A macroeconomic analysis of the main outcomes of Russia’s economic development in the Post-Soviet Period, in Problems of Economic Transition 56 (10), pp. 21 – 38.

Author Contact detail: 2 Pirogova street, Novosibirsk, 630090, Russian Federation, Novosibirsk National Research State University, Department of Economics, telephone: +7 9137697711, email: alexbaranov@mail.ru.

Elena Muzyko, Novosibirsk National Research State University

MUZYKO, Elena, is Associate professor of Economic Theory and Applied Economics Chair of Novosibirsk State Technical University. She earned her Ph.D. degree (2012) in Economics from Institute of Economics and Industrial Engineering, Siberian Branch of Russian Academy of Sciences; Master degree (2008) in Economics from Novosibirsk State Technical University; and Bachelor degree (2006) in Economics from Novosibirsk State Technical University. Her expertise areas are economics and finance. Her publications: (1) Muzyko E.I. (2011), Analysis of the development of approaches to economic essence of the category “real option” interpretation in Economic Analysis: Theory and Practice No. 36, pp: 12–17; (2) Baranov A.O, E. I. Muzyko , and V. N. Pavlov (2015) The use of fuzzy sets analysis for assessment of efficiency of innovative projects with venture financing based on real options method, in Siberian Financial School No. 4, pp. 90–96; (3) Muzyko E. I., and M. P. Maslov (2015), Innovative projecting: Methods and approaches, in Proceedings of the International Young Scientists Scientific Forum, Novosibirsk, November, 12-14, Novosibirsk: NSTU Publisher Vol. 2, pp. 83 – 89.

Author Contact detail: 20 K. Marx Avenue, Novosibirsk, 630073, Russian Federation, Novosibirsk State Technical University, Department of Business, telephone: +7 9139890713, email: mei927@mail.ru.

References

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