Measuring Value in Development with Advanced Real Options for International Sequential Acquisitions

Abstract

Even though the application of real options theory in international business research has increased substantially, the measurement of collaborative synergies in international sequential acquisition by means of advanced real options is still the theoreticall gap which needs to be filled by new research and promising area for empirical research. This paper moves the field forward and highlights the fact that strategic synergies can be considered as compound real options for growth that are opened by an international sequential acquisition and, thus, add market value to the acquirer. Our research is presented as a theory-building inductive case-based study. This paper aims to integrate sequential compound real options with real options that have changing volatility in order to evaluate collaborative tacit synergies (a value in development) of sequential international acquisitions; thus, it contributes to corporate finance, international business, and strategic management theory with a fresh evaluation of the applications of advanced real options.