nep-ppm New Economics Papers
on Project and Portfolio Management
Issue of 2007‒02‒17
six papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. A scatter search procedure for maximizing the net present value of a project under renewable resource constraints By Vanhoucke, M.
  2. The Cost Decision: A New Discount Approach for Net Cost Projects By Grant Pollard
  3. Mechanism design with private communication By Dequiedt, V.; Martimort, D.
  4. Innovation Activities Abroad and the Effects of Liability of Foreignness: Where it Hurts By Sofka, Wolfgang
  6. Family Planning as an Investment in Development: Evaluation of a Program's Consequences in Matlab, Bangladesh By Shareen Joshi; T. Paul Schultz

  1. By: Vanhoucke, M.
    Abstract: In this paper, we present a meta-heuristic algorithm for the well-known resource-constrained project scheduling problem with discounted cash flows. This optimization procedure maximizes the net present value of project subject to the precedence and renewable resource constraints. The problem is known to be NP-hard. We investigate the use of a enhanced bi-directional generation scheme and a recursive forward/backward improvement method and embed them in a meta-heuristic scatter search framework. We generate a large dataset of project instances under a controlled design and report detailed computational results. The solutions and project instances can be downloaded from a website in order to facilitate comparison with future research attempts.
    Keywords: Resource-constrained project scheduling; Net present value; Scatter search
    Date: 2006–10–04
  2. By: Grant Pollard (School of Economics and Finance, Queensland University of Technology)
    Abstract: This discussion paper proposes a new decision rule for economic investment theory, the Cost Decision, and describes a new discount approach for Net Cost Projects and the Net Present Cost Formula. The paper illustrates the problems faced internationally, at all levels of government, of assessing Net Cost Projects from a finance perspective. The paper discusses the Cost Decision in the controversial context of public-private partnerships and compares the four main alternative approaches to the Cost Decision currently used in practice. The paper is also relevant when analysing Net Cost Projects undertaken by private sector entities and individuals.
    Keywords: Corporate Finance; Investment; Economic Investment; Finance Investment; Discount Rate; Net Present Cost Formula; Cost Decision; Net Cost Projects; Social Projects; Net Present Cost; Net Present Value; Public-Private Partnerships; and Public Finance.
  3. By: Dequiedt, V.; Martimort, D.
    Abstract: We investigate the consequences of assuming "private" communication between the principal and each of his agents in an otherwise standard mechanism design setting.Doing so simplifies significantly optimal mechanisms and institutions. Moreover, it restores continuity of the principal's payoff and of the optimal mechanism with respect to the information structure while still maintaining the useful role of correlation to better extract the agents' information rent. We first prove a "Revelation Principle with private communication" that characterizes the set of allocations implementable under private communication by means of simple "non-manipulability constraints". We also demonstrate a "Taxation Principle" which helps drawing some links between private communication and limited commitment on the principal's side. Equipped with those tools, we derive optimal non-manipulable mechanisms in various environments (unrelated projects, auctions, team production).
    JEL: D82
    Date: 2007
  4. By: Sofka, Wolfgang
    Abstract: The innovation activities of foreign subsidiaries have been identified as an important source of competitive advantage for multinational corporations. The success of these engagements depends heavily on tapping host country pools of localized expertise. To achieve this foreign subsidiaries have to overcome cultural and social barriers (liability of foreignness). We derive potential stumbling blocks in the innovation process theoretically and argue that these materialize as neglected projects, cancellations or budget overruns. We test these hypotheses empirically for more than 1,000 firms with innovation activities in Germany from various sectors. We find that foreign-controlled firms are not challenged by liability of foreignness at the project mobilization stage. The lack of local embeddedness becomes more binding as projects have to be prioritized and managed which we identify as more frequent mistakes and delays. We argue that this is the result of shared practices within the multinational firm that do not readily fit into the local context. Finally, we derive management recommendations how foreign innovation engagements can achieve similar levels of effectiveness and efficiency as host country competitors.
    Keywords: Liability of foreignness, offshoring R&D, internationalization, innovation management
    JEL: D83 F23 O31 O32
    Date: 2006
  5. By: Nanak Kakwani (International Poverty Centre); Hyun H. Son (International Poverty Centre)
    Abstract: This paper proposes a new “Pro-Poor Policy (PPP)” index, which measures the pro-poorness of government programmes, as well as basic service delivery in education, health and infrastructure. The index provides a means to assess the targeting efficiency of government programmes compared to perfect targeting. The paper also deals with the policy issue of how targeting efficiency of government programmes varies across various socioeconomic groups. To this effect, the paper develops two types of PPP indices by socioeconomic groups, which are within-group and total-group PPP indices. The within-group PPP index captures how well targeted a programme is within a group. On the other hand, if our objective is to maximize poverty reduction at the national level, the targeting efficiency of particular group should be judged on the basis of total-group PPP index. Using micro unit-record data on household surveys from Thailand, Russia, Vietnam, and 15 African countries, the paper evaluates a wide range of government programmes and basic services.
    Keywords: Targeting, Universal, Pro-Poor, Poverty
    JEL: C15 I32
    Date: 2005–05
  6. By: Shareen Joshi (University of Chicago); T. Paul Schultz (Economic Growth Center, Yale University)
    Abstract: The paper analyzes 141 villages in Matlab, Bangladesh from 1974 to 1996, in which half the villages received from 1977 to 1996 a door-to-door outreach family planning and maternal-child health program. Village and individual data confirm a decline in fertility of about 15 percent in the program villages compared with the control villages by 1982, as others have noted, which persists until 1996. The consequences of the program on a series of long run family welfare outcomes are then estimated in addition to fertility: women’s health, earnings and household assets, use of preventive health inputs, and finally the inter-generational effects on the health and schooling of the woman’s children. Within two decades many of these indicators of the welfare of women and their children improve significantly in conjunction with the program-induced decline in fertility and child mortality. This suggests social returns to this reproductive health program in rural South Asia have many facets beyond fertility reduction, which do not appear to dissipate over two decades.
    Keywords: Fertility, Family Planning, Gender and Development, Program Evaluation, Bangladesh
    JEL: O12 J13 I12 J16
    Date: 2007–02

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