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on Project and Portfolio Management |
| By: | Gryglewicz,Sebastian; Huisman,Kuno J.M.; Kort,Peter M. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper revisits the important result of the real options approach to investment under uncertainty, which states that increased uncertainty raises the value of waiting and thus decelerates investment. Typically in this literature projects are assumed to be perpetual. However, in today.s economy .rms face a fast-changing technology environment, implying that investment projects are usually considered to have a .nite life. The present paper studies investment projects with .nite project life, and we .nd that, in contrast with the existing theory, investments may be accelerated by increased uncertainty. It is shown that this particularly happens when uncertainty is limited and project life is short. |
| Keywords: | investment;uncertainty;finite project lenght |
| JEL: | D92 E22 G31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2006124&r=ppm |
| By: | William Roy (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Alain Bonnafous (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Pablo Jensen (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat], LPMCN - Laboratoire de Physique de la Matière Condensée et Nanostructures - [CNRS : UMR5586] - [Université Claude Bernard - Lyon I]) |
| Abstract: | Bien qu'il puisse être appliqué à diverses sortes d'équipements publics, l'objet de cet article concerne les investissements d'infrastructure dans le secteur des transports. Il pose le problème de l'articulation entre les évaluations économiques et financières. Il s'agit d'optimiser le rendement social au sens du calcul économique, mais en prenant en compte deux aspects trop négligés : d'une part, le fait que la plupart des grands investissements candidats seront cofinancés par l'usager et le contribuable, comme l'ont été les investissements récents ; d'autre part, la nécessité de ne pas seulement raisonner sur la détermination du meilleur projet, mais sur la détermination du meilleur programme de projets. Cet article montre l'attrait du ratio de « l'utilité collective par euro public investi », en tant que critère permettant appréhender les effets de l'intensification de la contrainte financière publique. |
| Keywords: | Infrastructure, investissement, ordre, choix public |
| Date: | 2007–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00122918_v1&r=ppm |
| By: | Bhat Ramesh; Mavalankar Dileep; Maheshwari Sunil; Saha Somen |
| Abstract: | Andhra Pradesh had initiated the Urban Slum Health Care Project to provide basic primary healthcare and family welfare services to urban poor living in slums in 2002. As of now, the project has established 192 Urban Health Centres (UHCs) in 74 municipalities of the state through contracting-out process to the NGOs. These UHCs cover population of about 3 million. State government has played pivotal role in creating capacities to monitor and supervise the functioning of these UHCs. This project was started with the World Bank support and the state has effectively managed the transition from a donor-funded project to government programme and at the same achieving demonstrable impact on health status among its target population. The scheme ensures people’s participation in management of the UHCs and placing the power for identifying the health priority in the hand of the community. The case study identifies emerging challenges in the scheme implementation relating to (a) involvement of NGOs as partners in service delivery, (b) financing and financial management system, and (c) need to reposition the UHCs in view of changing epidemiological scenario. Some of the areas needing attention to address the challenge include: need to refine the service mix to better respond to the health needs of the population served; evolving a financial management practices to increase efficiency in disbursement; motivating NGOs to actively participate in the scheme; developing management capacity and competencies of both partners; and repositioning relationship between the state and non-state actors away from a contractual basis to an effective partnership. |
| Date: | 2007–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2007-01-07&r=ppm |
| By: | Albert van der Horst; Arjan Lejour; Bas Straathof |
| Abstract: | Innovation seldom has purely domestic causes and consequences, but how can a European innovation policy complement or substitute national policies? Taking the subsidiarity principle as a starting point, this report discusses the economic rationale of a European innovation policy. Explorative empirical analysis suggests that public R&D and public funding of private R&D are subject to economies of scale and external effects. This is an argument in favour of a European innovation policy but amongst other things, the heterogeneity in social economic objectives on public R&D spending between Member States pleas for national government involvement. In addition, there are scale economies in the protection of intellectual property and in the development of standards. We conclude that a European innovation policy could have, or already has, substantial benefits over purely national policy in these areas. With respect to innovation policies targeted at SMEs, we do not find economies of scale or external effects. It seems to be efficient that these policies are mainly conducted at the national level. |
| Keywords: | innovation policy; subsidiarity; European Union |
| JEL: | O38 H77 H87 F15 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:docmnt:132&r=ppm |
| By: | Tarmo Valkonen |
| Abstract: | TAX INCENTIVES OF R&D It is popular to promote private R&D investments with tax credits or tax allowances in the OECD countries. This report depicts the justifications and criteria presented in economic literature, which should be used when decisions about tax incentives are made. The main argument is that firms do not consider all the social welfare gains, when they decide about an R&D investment. Another linked justification is that the production based on the innovation may be too small, because the firm must finance the sunken costs generated both by the failed and the successful trials, and sell with a price that is higher than the marginal costs. On the other hand, there are also negative externalities involved in R&D investments. Moreover, introduction of a tax incentive necessitates that the welfare gain generated is sufficient to cover the losses due to the marginal costs of public funds, which appear due to the lost tax revenues. The report concludes that there are well-founded theoretical reasons for promoting private R&D investments with public funds, but the optimal scale and the best methods, such as choice between direct support and tax incentives, are questions to be solved by empirical studies. |
| Keywords: | research and development investments, tax incentives |
| JEL: | H25 O1 O4 |
| Date: | 2007–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1066&r=ppm |