A Portfolio Approach to Economic Development

The Journal of Applied Business Research, Vol. 26, No. 2, pp. 69-91, 2010

27 Pages Posted: 2 Feb 2011 Last revised: 5 Mar 2013

See all articles by Tam Bang Vu

Tam Bang Vu

University of Hawaii at Hilo

Terrance Jalbert

University of Hawaii - Department of Business Administration

David Hammes

Economics

Date Written: January 31, 2011

Abstract

In this paper we introduce and empirically demonstrate a new model of economic development that we call Portfolio Economic Development. Our approach borrows from portfolio theory in finance and focuses on the risk-return nature of development projects. The paper examines how the loss of a dominant industry group from an island economy causes significant economic problems and how those problems might be mitigated by developing the economy in a portfolio context. The approach can help planners select optimal mixes of projects for development of any economy experiencing a transitional period.

Keywords: Economic Development, Portfolio Theory, Island Economics, Economic Development

Suggested Citation

Vu, Tam Bang and Jalbert, Terrance and Hammes, David, A Portfolio Approach to Economic Development (January 31, 2011). The Journal of Applied Business Research, Vol. 26, No. 2, pp. 69-91, 2010, Available at SSRN: https://ssrn.com/abstract=1752623

Tam Bang Vu

University of Hawaii at Hilo ( email )

200 W. Kāwili St.
Hilo, HI 96720-4091

Terrance Jalbert (Contact Author)

University of Hawaii - Department of Business Administration ( email )

808-974-7456 (Phone)

David Hammes

Economics ( email )

Hilo, HI 96720-4091
United States

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