How to evaluate and invest in emerging A/E/C technologies under uncertainty

S. Ping Ho, Liang Y Liu

Research output: Contribution to journalArticle

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.

Original languageEnglish (US)
Pages (from-to)16-24
Number of pages9
JournalJournal of Construction Engineering and Management
Volume129
Issue number1
DOIs
StatePublished - Jan 1 2003

    Fingerprint

Keywords

  • Construction management
  • Financial management
  • Management methods
  • Risk management
  • Technology

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Building and Construction
  • Industrial relations
  • Strategy and Management

Cite this