TMIDI703: Finance of Innovation

Doctorate of Philosophy (PhD) in Innovation Management

Financing innovation is one of the most complex challenges facing developing countries. In addition to direct funding to research, Venture Capital (VC) represents one of the most critical inputs into the business creation process. The course should provide the importance to investigate the underlying economic and financial models that influence the success or failures of innovation-driven changes.

This course is designed to take Engineers, scientists, technologists and those starting new ventures through the essential knowledge and skills of approaches for assessing innovation projects with regard to the financial investment

Required Text:

Topics to be covered:

  1. Introduction to Finance of innovation
    Guest Speaker: Dr. Seref Turen (sturen@uob.edu.bh)
    Financial crisis and the finance of innovation
    Guest Speaker: Dr. Mohammad Farooq (mfarooq@uob.edu.bh)
    Islamic finance and the finance of innovation
  2. Valuation of new ventures and innovations
    Guest Speaker: Dr. Mehdi Mili (mmili@uob.edu.bh)
    Risk and the finance of innovation
  3. Understand the “research and development” (R&D) finance
    Guest Speaker: Dr. Adel Al-Alawi (aialalawi@uob.edu.bh)
    Fintech Technology Innovation in Financial Services
  4. Research Project Presentation

Assessment Tasks for students during the course

  • 2 assignments (Day 1 and Day 3) – 40%
  • Research paper presentation (Day 5) – 50%
  • Workshop participation (Daily) – 10%

Assignments

  1. Writing assignment: A maximum 500 words report regarding your analysis of the 10th Annual Private Equity and Venture Capital report-2015 (submit your assignment as an E-mail attachment in Word to hatem.masri@gmail.com on Monday 17 April 2017 before 8:30AM)
  2. News search essay: Report on an example of Islamic venture capital investment that were made in the past (search on internet or in http://www.zawya.com/) and email a maximun 500 words report in Word to hatem.masri@gmail.com on Tuesday 18 April 2017 before 8:30AM).

Excel Files

Reference Material 

  1.  Lee, N., Sameen, H., & Cowling, M. (2015). Access to finance for innovative SMEs since the financial crisis. Research policy44(2), 370-380. Link
  2. Zouaghi, F., & Sánchez, M. (2016). Has the global financial crisis had different effects on innovation performance in the agri-food sector by comparison to the rest of the economy?. Trends in Food Science & Technology50, 230-242. Link
  3. Giebel, Marek and Kraft, Kornelius, The Impact of the Financial Crisis on Investments in Innovative Firms (September 2015). ZEW – Centre for European Economic Research Discussion Paper No. 15-069. Available at SSRN: https://ssrn.com/abstract=2666595
  4. Alfranseder, E., & Dzhamalova, V. (2014). The Impact of the Financial Crisis on Innovation and Growth: Evidence from Technology Research and Development (No. 2014/8). Knut Wicksell Centre for Financial Studies, Lund University. Link
  5. Milberg, W., & Shapiro, N. (2013). Implications of the recent financial crisis for firm innovation. Journal of Post Keynesian Economics36(2), 207-230. Link
  6. Gu, L. (2016). Product market competition, R&D investment, and stock returns. Journal of Financial Economics119(2), 441-455. Link
  7. Ho, S. S., Li, A. Y., Tam, K., & Tong, J. Y. (2016). Ethical image, corporate social responsibility, and R&D valuation. Pacific-Basin Finance Journal40, 335-348. Link
  8. Gharbi, S., Sahut, J. M., & Teulon, F. (2014). R&D investments and high-tech firms’ stock return volatility. Technological Forecasting and Social Change88, 306-312. Link
  9. Martinsson, G. (2010). Equity financing and innovation: Is Europe different from the United States?. Journal of Banking & Finance34(6), 1215-1224. Link
  10. Bhattacharya, A. (2017). Innovations in new venture financing: Evidence from Indian SME IPOs. Global Finance Journal, Published online. Link
  11. Baranov, A., & Muzyko, E. (2015). Valuation of Compound Real Options for Investments in Innovative Projects in Pharmaceutical Industry. Procedia Economics and Finance27, 116-125. Link
  12. Rogova, E., & Yarygin, A. (2012). Valuing Innovation-Based Investments with the Weighted Average Polynomial Option Pricing Model. Available at http://realoptions.org/openconf2012/data/papers/53.pdf
  13. Kim, S., Lee, H., & Kim, J. (2016). Divergent effects of external financing on technology innovation activity: Korean evidence. Technological Forecasting and Social Change106, 22-30. Link
  14. Lange, K., Müller-Seitz, G., Sydow, J., & Windeler, A. (2013). Financing innovations in uncertain networks—Filling in roadmap gaps in the semiconductor industry. Research Policy42(3), 647-661. Link
  15. Luo, J. L., & Hu, Z. H. (2015). Risk paradigm and risk evaluation of farmers cooperatives’ technology innovation. Economic Modelling44, 80-85. Link
  16. Beck, T., Chen, T., Lin, C., & Song, F. M. (2016). Financial innovation: The bright and the dark sides. Journal of Banking & Finance72, 28-51. Link
  17. Wang, H., Liang, P., Li, H., & Yang, R. (2016). Financing Sources, R&D Investment and Enterprise Risk. Procedia Computer Science91, 122-130. Link
  18. Bashir, A. H. M. (2002). The welfare effects of inflation and financial innovation in a model of economic growth: An Islamic perspective. Journal of Economic Studies29(1), 21-32. Link
  19. Al-Salem, F. H. (2009). Islamic financial product innovation. International Journal of Islamic and Middle Eastern Finance and Management2(3), 187-200. Link
  20. Arouri, M. E., Ben Ameur, H., Jawadi, N., Jawadi, F., & Louhichi, W. (2013). Are Islamic finance innovations enough for investors to escape from a financial downturn? Further evidence from portfolio simulations. Applied Economics45(24), 3412-3420. Link
  21. Kiong Kok, S., Giorgioni, G., & Laws, J. (2014). Derivative products and innovation in Islamic finance: A hybrid tool for risk-sharing options. International Journal of Islamic and Middle Eastern Finance and Management7(3), 242-257. Link

Research Paper Presentation

Students are expected to form a group with 1-3 persons and then read, summarize and write a written critique/perspective of the research paper that they presented. Research Paper presentations are 20 minutes in length (15 minutes for the presentation with five (5) minutes for questions and answers):

Opening:

  • Jump right in by stating the question you will answer.
  • Give your rehearsed opening statement; don’t improvise at the last moment.
  • Use the opening to catch the interest and attention of the audience.
  • Briefly state the problem or topic you will be discussing.
  • Briefly summarize your main theme for an idea or solution.

Speaking

  • Talk at a natural, moderate rate of speech
  • Project your voice.
  • Speak clearly and distinctly.
  • Repeat critical information.
  • Pause briefly to give your audience time to digest the information on each new slide.

PowerPoint Slides

  • Let the pictures or graphics in your PowerPoint slides tell the story – don’t overload with text and/or data. Too much text makes the slide unreadable.
  • The aim is to have a few powerful PowerPoint slides.
  • Prepare an Agenda or Table of Contents slide.
  • Proofread everything, including visuals and numbers.
  • Font size must be large enough to be easily read. Size 28 to 34 with a bold font is recommended.
  • It is distracting if you use too wide a variety of fonts.
  • Animation effects can be interesting.
  • Too much animation is distracting.
  • You can insert video and audio clips into PowerPoint, but the clips must be on your laptop: you cannot access them through the internet
  • Don’t read the slides aloud. Your audience can read them far faster than you can talk.
  • Numbers are usually confusing to the audience. Use as few as possible and allow extra time for the audience to do the math.
  • Consider presenting data in chart or graph form, which is more easily understood than a chart with numbers.
  • Cite your source on the same slide as the statistic, using a smaller size font.
  • Charts need to be clearly labeled. You can make more interesting charts by adding elements from the drawing toolbar.
  • Backgrounds in PowerPoint slides should never distract from the presentation. Backgrounds that are light colored with dark text, or vice versa, look good. A dark background with white font reduces glare.

Length:

  • Research Papers are 15 minutes in length with 5 minutes for Q&A.
  • End on time! There is another presentation following yours in the same room.

Plagiarism and Cheating

The course has a zero tolerance policy for academic dishonesty, including plagiarism and cheating.  Any student caught cheating on a quiz will receive no credit for that assignment. Note that in these cases, both students will receive no credit for the assignment. For the student assignments/presentations, plagiarism of materials from the web or from scientific journals without proper citation will result in no credit for the assignment.

Course Assessment Form

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