Search by keyword: Elginsky Coal Field
Considering Real Options to Develop an Industry While Implementing Industrial Policy
The paper considers approaches to evaluate how effective is selective government support for investment projects within state industrial policy. It is hypothesized that using modern concepts of industrial policy, suggested by foreign scientists and oriented towards stimulating the search for new business solutions that diversify the structure of national economy, requires a shift from a traditional model of discounting costs and benefits to a model of evaluating real options while selecting projects and providing government support. We give a characteristic of similarities and differences between a classic real option to expand business, used to prove commercial performance of a project, and a real option to develop an industry, which justifies economic viability of selective government support of certain projects from national economic points of view
Keywords: Sakhalin Oblast industrial policy diversification of economy government business support Elginsky Coal Field subsidizing of interest expenditures real options demonstration effects
Assessing efficiency of the development of the Elginsky Field
The paper assesses the development of the Elginsky Coal Field located in the area of Baikal-Amur Main Line (BAM) by Discounted Cash Flow Analysis and Real Options Analysis. The latter allowed us to state that the decision made by the company «Russian Rail Ways» («RZhD») on its withdrawal from this project proved to be commercially erroneous. Applying a Black - Scholes model, we can state that a license price for the development of the Elginsky Coal Field proved to be underestimated at the public tender.
Shemetova V. G. viktoriya-shemetova@yandex.ru
Keywords: assessment area of the Baikal-Amur Railroad project area of Baikal-Amur Main Line (BAM) Elginsky Coal Field assessments real options analysis discounted cash flow analysis
