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http://dx.doi.org/10.7232/JKIIE.2015.41.2.150

A Market-Based Replacement Cost Approach to Technology Valuation  

Kang, Pilsung (School of Industrial Management Engineering, Korea University)
Geum, Youngjung (Department of Industrial and Systems Engineering, Seoul National University of Science and Technology)
Park, Hyun-Woo (Department of Industry and Market Analysis, Korean Institute of Science and Technology Information)
Kim, Sang-Gook (Department of Industry and Market Analysis, Korean Institute of Science and Technology Information)
Sung, Tae-Eung (Department of Industry and Market Analysis, Korean Institute of Science and Technology Information)
Lee, Hakyeon (Department of Industrial and Systems Engineering, Seoul National University of Science and Technology)
Publication Information
Journal of Korean Institute of Industrial Engineers / v.41, no.2, 2015 , pp. 150-161 More about this Journal
Abstract
This paper proposes a new approach to technology valuation, the market-replacement cost approach which integrates the cost-based approach and market-based approach. The proposed approach estimates the market-replacement cost of a target technology using R&D costs of similar R&D projects previously conducted. Similar R&D projects are extracted from project database based on document similarity between project proposals and technology description of the target technology. R&D costs of similar R&D projects are adjusted by mirroring the rate of technological obsolescence and inflation. Market-replacement cost of the technology is then derived by calculating the weighted average of adjusted costs and similarity values of similar R&D projects. A case of "Prevention method and system for the diffusion of mobile malicious code" is presented to illustrate the proposed approach.
Keywords
Technology valuation; Market-replacement cost; Market approach; Cost approach; Text mining;
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