| Title |
R&D investment decision on smart cities: Energy sustainability and opportunity |
| ID_Doc |
40648 |
| Authors |
Biancardi, M; Di Bari, A; Villani, G |
| Title |
R&D investment decision on smart cities: Energy sustainability and opportunity |
| Year |
2021 |
| Published |
|
| DOI |
10.1016/j.chaos.2021.111554 |
| Abstract |
Public administrations frequently tend to make communities as much sustainable as possible pursuing smart city goals. Solar energy investments represent a valid opportunity to support smart cities and con-sequently the sustainable economic development. The valuation of these projects is not a simple task considering their sequential nature and riskiness. This article proposes a compound Real Options Ap-proach (ROA) as a tool for potential investors to make a conscious R&D renewable investment decision on smart cities. In this sense, we fit the compound ROA with the framework of a typical smart city project in solar energy field. We also provide a case study to make a comparison between classical Expected Net Present Value (ENPV) approach and compound ROA. The results show that ENPV underestimates the project value, whereas compound ROA allows to obtain a more attractive valuation of the project by em -bedding in the analysis the managerial flexibility value. (c) 2021 Elsevier Ltd. All rights reserved. |
| Author Keywords |
Smart city project; Expected Net Present Value; Compound Real Option Approach; Solar energy project |
| Index Keywords |
Index Keywords |
| Document Type |
Other |
| Open Access |
Open Access |
| Source |
Science Citation Index Expanded (SCI-EXPANDED); Social Science Citation Index (SSCI) |
| EID |
WOS:000729447800005 |
| WoS Category |
Mathematics, Interdisciplinary Applications; Physics, Multidisciplinary; Physics, Mathematical |
| Research Area |
Mathematics; Physics |
| PDF |
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