Predictability of asset bubbles : economic bubbles and the effect they have on economies : a Delphi Study on the predictability of economic bubbles and the possibility to prevent them

Kruse, David (2017) Predictability of asset bubbles : economic bubbles and the effect they have on economies : a Delphi Study on the predictability of economic bubbles and the possibility to prevent them.

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Abstract:Investment activities in technology related companies increased tremendously due to the combination of missing investments alternatives in the market and exuberance amounts of investors who are looking for an attractive return on their investment. As consequence, companies with a valuation higher than one billion dollars are no exception even though they miss a revenue generating model. Due to this hazardous combination, a bubble fostering environment is assumed. However, existing academic literature with a focus on asset bubbles in the technology sector is missing. Therefor this thesis investigated the future of company valuations in the technology related sector with the help of a literature study, a financial statement analysis and a Delphi method Subsequently to the data collection, crisis specific indicators were identified. Furthermore, due to lacking due diligence and expertise on the investors side, the current investment behaviour was identified as unsustainable. In addition, a certain degree of predictability, which increases with the degree of transparency was identified. This indicates that the global economy is not actively encouraging a change in the status quo. Hence, it can be concluded that the global economy encourages the creation of technology related asset bubbles due their lack of actions.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/73497
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