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Article
Publication date: 11 September 2017

Ozcan Saritas, Yury Dranev and Alexander Chulok

Dynamic changes in the world bring challenges for making long-term future-oriented policy and strategy. A number of recent developments like drops in oil prices…

Abstract

Purpose

Dynamic changes in the world bring challenges for making long-term future-oriented policy and strategy. A number of recent developments like drops in oil prices, increasing global conflicts, mass immigration and economic stagnation have had disruptive effects on long-term policies and strategies. The purpose of this paper is to provide a dynamic and adaptive Foresight approach as required by the fast-changing global landscape.

Design/methodology/approach

The scenario approach presented in the paper aims to develop multiple time horizons by bringing together short-term forecasts and long-term exploratory and visionary scenarios. Each time horizon allows for re-considering and dynamically changing drivers and assumptions of scenarios and thus builds not a single linear, but multiple and dynamic pathways into the future. Following the presentation on the background and description of the methodology, the paper illustrates the proposed approach with a case study on science and technology (S&T) development in Russia.

Findings

The flexible scenario approach allows developing and strategies with similar adaptability and flexibility.

Practical implications

The scenario approach presented in the paper may be applicable for Foresight exercises at all levels of governance, including national, international, regional and corporate.

Originality/value

A novel scenario approach is presented for the formulation of S&T policy with an illustrative case study.

Details

foresight, vol. 19 no. 5
Type: Research Article
ISSN: 1463-6689

Keywords

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Article
Publication date: 13 November 2017

Yury Dranev, Albert Levin and Ilia Kuchin

The purpose of this research is to look at the effects of research and development expenditures (R&D) on value and risks of publicly traded companies by studying returns…

Abstract

Purpose

The purpose of this research is to look at the effects of research and development expenditures (R&D) on value and risks of publicly traded companies by studying returns on stock exchanges of R&D-intensive economies (Republic of Korea, Finland and Israel).

Design/methodology/approach

Empirical tests of multifactor asset pricing models were applied to demonstrate that R&D intensity could be considered as a pricing factor and affect investors’ risk premiums on those markets. To discover the reasons behind the asset pricing R&D anomaly, this study investigated the nature of R&D risk further by looking into the interactions of R&D and currency risks.

Findings

This study discovered that investors in stock markets of R&D-intensive countries should require a positive equity risk premium. However, the reduction of R&D intensity may increase firms’ risks and firms with higher R&D-intensity are less exposed to currency risks in R&D-intensive economies.

Originality/value

Many researchers have investigated the relationship between a firm’s R&D and stock returns. But nearly all of them focus on the US Stock Market and attempt to determine the reasons for R&D’s impact on firms’ risks and market value. Meanwhile, the role of R&D and related risks for investors could be even more prominent for stock markets in R&D-intensive countries. To bridge this gap, this research studied stock returns on exchanges of three developed countries where the ratio of gross domestic expenditure on R&D (GERD) to GDP is among the highest worldwide. In this study, the methodology of asset pricing empirical studies was adopted and it was further developed to analyze the causes of R&D risks. The new methodology was applied to discover relationship between R&D intensity and currency risk exposure. The interesting findings could be used for development of firms’ corporate strategies in those countries and for elaboration of policy decisions.

Details

foresight, vol. 19 no. 6
Type: Research Article
ISSN: 1463-6689

Keywords

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