Han Smit, born in Leiden, the Netherlands, in 1967. Ph.D. from the University of Amsterdam. Associate Professor of Finance at the Erasmus University Rotterdam.
Fellow (1 September 1998 – 30 June 1999)
My research dealt primarily with the valuation of strategic growth opportunities of firms. The forthcoming book “Strategic Investment: Real Options and Games”, (with Lenos Trigeorgis) describes an integrated real options and game theory approach to bridge the gap between traditional corporate finance and strategic planning. Thinking in terms of option games helps answer various strategic questions that are associated with growth opportunities. For instance, when is it attractive to invest early to preempt competitive entry and when is it better to wait; should the firm compete in R&D or is taking an accommodating stance via a joint research venture more appropriate?
Empirical research of ‘in-dept applications’ and statistical tests provided further insight in the value of growth. The empirical study shows that growth prospects are clearly reflected in stock prices and influence the risk and return-profile of a firm and/or a sector. The results confirm that growth stocks exhibit significantly the real option characteristics.