Download This PaperA 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
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
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