Methodology for Assessing the Investment Attractiveness of IT Industry (Using the IT Industry as an Example)

The objective of the article is to develop methodology for assessing the investment attractiveness of an industry and to test it for the information technology industry. The study is based on the data from the Moscow Exchange and Russian public companies. The author employs methods for constructing and analysing production functions, comparative analysis of capitalization and investment data, and estimating industry price multipliers. As a result of testing procedure of the methodology on data from the information technology industry the research has revealed factors contributing its high investment attractiveness, namely, its membership in a new technological paradigm, significant growth and efficiency of revenue and investment, increasing returns on resources invested in the industry; and positive market expectations, which determine high level of prices for multiples. In conclusion, the IT industry is one of the most investment-attractive and fundamentally undervalued sectors of the Russian economy, although investments in it are associated with high risk. 

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