Offshore Outsourcing Contracts: The Real Options Analysis Using Trinomial Option Pricing Model  

Oleh:

Krishnaswamy, C.R. ; Rathinasamy, Rathin S.

Jenis: Article from Proceeding
Dalam koleksi: The International Symposium on Social Sciences (TISSS) and Hong Kong International Conference on Education, Psychology and Society (HKICEPS) at Hongkong, December 2013, page 377-388.
Topik: Real options; Trinomial model; Outsourcing; Time and materials contracts
Fulltext: Hong Kong-Conference 58.pdf (377.12KB)

Isi artikel

In this paper, we analyze the offshore outsourcing contract types using the Trinomial Model. This model is very useful in analyzing real options associated with Projects. Earlier studies by Granedier (1995) and Pashley, Krishnaswamy and Gilbert (1997) have used the option pricing model to analyze lease contracts and debt contracts respectively. So far there are no studies that address offshore outsourcing contracts. Gopal et al (2003), Ethiraj et al (2004), Gopal and Koka (2010) and Gopal and Koka(2012) have found, through empirical studies, that there is a significant relationship between profits and type of contracts, and price and types of contracts respectively. But they do not provide a theoretical basis for their findings. In this paper we provide a theoretical basis for such a relationship using the real options analysis using trinomial option pricing model. To our knowledge, this is the first study that does theoretical analysis of such a relationship using trinomial model.

Opini Anda

Klik untuk menuliskan opini Anda tentang koleksi ini!

Kembali