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Serendipity, redeployability and shadow optionality

21 March 2019 at 11:30 AM - 1:00 PM

Room 205b, Campus on Viale Romania, 32

Speaker: Mariano Mastrogiorgio, IE Business School

Abstract:

"The concept of serendipity points to the ‘happy accidents’ that permeate modern science, research and innovation, and which have often paved the way for many impactful innovations. Despite this relevance, strategy and technology scholars have only recently turned their attention on the financial implications of serendipity. Drawing on recent insights from the strategic factor markets theory, we develop hypotheses about how serendipity may affect firm value depending on options value. In line with our theory, the analysis confirms that serendipitous innovation is positively related with financial performance and that this effect is negatively moderated by the return volatility in a firm’s core industry. Finally, serendipity has a positive but temporary effect on stock performance."