nep-ppm New Economics Papers
on Project and Portfolio Management
Issue of 2007‒02‒24
eight papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Patents, Trade Secrets and the Correlation Among R&D Projects By Bulut, Harun; Moschini, GianCarlo
  2. On Moral Hazard and Joint R&D By Simona Fabrizi; Steffen Lippert
  3. Modelling the initial pit design: the first step for project valuation By Rodney C Wolff; Luis A Martinez
  4. The Political Economy of Public Investment By Beetsma, Roel; van der Ploeg, Frederick
  5. Earmarking: Bundling to Signal Quality By Amihai Glazer; Stef Proost
  6. A Dynamic Equilibrium Model of Firm's Life Cycle and Mergers as Efficient Reallocation By Frantzeskakis, Kyriakos; Ueda, Masako
  7. Graduate Unemployment in the Context of Skills Shortages, Education and Training: Findings from a Firm Survey By Kalie Pauw; Haroon Bhorat; Sumayya Goga; Liberty Ncube; Morné Oosthuizen; Carlene van der Westhuizen
  8. Vision 2023: Turkey’s National Technology Foresight Program – a contextualist description and analysis By Ozcan Saritas; Erol Taymaz; Turgut Tumer

  1. By: Bulut, Harun; Moschini, GianCarlo
    Abstract: In patent race models, firms' noncooperatively chosen research projects typically display too much correlation. But when there are multiple intellectual property rights protection instruments, we find that the paths chosen in an R&D race can move towards the social optimum.
    Keywords: Intellectual property rights; Parallel R&D; Patent races
    Date: 2007–02–22
  2. By: Simona Fabrizi (Keele University, Centre for Economic Research and School of Economic and Management Studies); Steffen Lippert (Department of Commerce, Albany Campus, Massey University)
    Abstract: This paper analyzes how the determinants of two entrepreneurs’ choice whether to conduct product innovation R&D projects alone, or in a cross license agreement, or in a research joint venture depend on the intrinsic nature of the R&D projects. Results show that in fundamental research -- which is considered to be affected by moral hazard behavior of the researchers -- there is a systematic bias toward conducting R&D projects alone and against making use of synergies in an RJV. Furthermore, from a social standpoint, in non-fundamental research -- which is considered not to be affected by moral hazard behavior of the researchers -- too few RJVs and too few cross license agreements are chosen; whereas in fundamental research too few RJVs, and too many cross license agreements are chosen.
    Keywords: Monetary policy, zone of discretion, intermediate inflation target.
    JEL: D23 D82 L24 O31 O32
    Date: 2007–01
  3. By: Rodney C Wolff; Luis A Martinez (School of Economics and Finance, Queensland University of Technology)
    Keywords: Metal price; mining risk; open pit design; orebody estimation; production costs; real options
    Date: 2006–06–15
  4. By: Beetsma, Roel; van der Ploeg, Frederick
    Abstract: The political distortions in public investment projects are investigated within the context of a bipartisan political economy framework. The role of scrapping and modifying projects of previous governments receives special attention. The party in government has an incentive to overspend on large ideological public investment projects in order to bind the hands of its successor. This leads to a bias for excessive debt, especially if the probability of being removed from office is large. These political distortions have implications for the appropriate format of a fiscal rule. A deficit rule, like the Stability and Growth Pact, mitigates the overspending bias in ideological investment projects and improves social welfare. The optimal second-best restriction on public debt exceeds the level of public debt that would prevail under the socially optimal outcome. Social welfare may be boosted even more by appropriate investment restrictions: with a restriction on (future) investment in ideological projects, the current government perceives a large benefit of a debt reduction. However, debt and investment restrictions are not needed if investment projects only have a financial return.
    Keywords: bipartisan; deficit rule; golden rule; ideological projects; investment restriction; market projects; political economy; public investment; scrapping public investment
    JEL: E6 H6 H7
    Date: 2007–02
  5. By: Amihai Glazer (Department of Economics, University of California-Irvine); Stef Proost (Faculty of Economics and Applied Economics, Catholic University of Leuven)
    Abstract: Earmarking is a form of bundling in which government adopts a tax policy while specifying the uses of the revenue. This paper explores how bundling can enhance efficiency: it can inform the public of the quality of a program proposed, or of the quality of the agency that will be responsible for designing and implementing the program.We show that policies that appear inefficient in isolation may become justified when bundled.
    Keywords: Earmarking; Asymmetric information; Bureaucracy; Project evaluation
    JEL: D73 D83 H43
    Date: 2007–02
  6. By: Frantzeskakis, Kyriakos; Ueda, Masako
    Abstract: Any factor that makes acquisition more appealing should increase the number of acquisition that occur. This idea has been captured in standard static models in the literature. However, an increase in the number of acquisitions today means fewer firms exist to perform acquisitions in the future. This dynamic, which we explore, is not well understood. We study a model of mergers motivated by efficient reallocation of projects. A firm may conceive a project that it may not be able to develop successfully. It can be acquired by an established firm that has already proved its ability to develop such projects successfully. We find that, when acquisition costs are low established firms acquire young firms (but not other established firms) in the steady state. More strikingly, if the likelihood of project success decreases for young firms, we find that a higher fraction of young firms attempt to develop their projects rather than to be acquired. This contrasts the previous literature's findings on acquisitions. The explanation for this result is that an increased likelihood of firms' failures causes a shortage of established firms that can then acquire new young firms. Finally, if acquisition costs are moderate we find that established firms acquire other established firms, but not young firms.
    Keywords: firm's life cycle; mergers as reallocation
    JEL: D83 D92 G34
    Date: 2007–02
  7. By: Kalie Pauw; Haroon Bhorat; Sumayya Goga; Liberty Ncube; Morné Oosthuizen; Carlene van der Westhuizen (Development Policy Research Unit,University of Cape Town)
    Abstract: Abstract: The paper reflects on the findings from a firm survey conducted among twenty of South Africa’s largest firms across a range of sectors. The survey formed part of research conducted by the Development Policy Research Unit on graduate unemployment in South Africa. The firm interviews traversed a range of issues relating, for example, to the schooling and higher education system, the learnership programme and National Skills Development Strategy (NSDS) and the nature of skills shortages and the skills deficit. In turn, a number of detailed long- and short-run policy suggestions emanated from the interviews and background research. In the context of skills shortages the persistence of unemployment among graduates is puzzling. However, the findings here suggest that reported skills shortages, especially in occupations such engineers, technicians and scientists, are most severe at the middle- to senior management level. Graduates do not compete for these positions; in fact, firms generally agree that there are enough graduates available in the economy. Firms do feel,however, that graduates often do not possess the necessary skills and experience to be considered even for entry-level positions. Poor education therefore lies at the heart of the graduate unemployment problem. While on-the-job training in the form of learnerships, implemented in accordance with the NSDS can potentially bridge the skills deficit of graduates, the survey findings rather suggest that this subsidised employment and training programme has not generated above-equilibrium employment in firms. While short-term interventions may help alleviate immediate skills shortages in the economy,it is clear from this research that a longer-term agenda of radically improving education and training in South Africa is the only sustainable solution to skills shortages and, eventually, the graduate unemployment problem.
    Keywords: graduate unemployment, skills shortages
    JEL: A1
    Date: 2006–11
  8. By: Ozcan Saritas (PREST, Manchester Business School, University of Manchester); Erol Taymaz (Department of Economics, METU); Turgut Tumer (Department of Mechanical Engineering, METU)
    Abstract: This paper describes and analyses Vision 2023 Turkish National Technology Foresight Program. The paper is not about a mere description of the activities undertaken. It analyses the Program from a contextualist perspective, where the Program is considered in its own national and organizational contexts by discussing how the factors in these contexts led to the particular decisions taken and approaches adopted when the exercise was organized, designed and practiced. With the description and analysis of the Vision 2023 Technology Foresight Program, the paper suggests that each Foresight exercise should be considered in its own context. The exercise should be organized, designed and practiced by considering the effects of the external contexts (national, regional and/or corporate) and organizational factors stemming from these different context levels along with the nature of the issue being worked on, which constitute the content of the exercise.
    Keywords: Foresight, contextualism, Vision 2023, Turkey, Science and Technology Policy
    Date: 2006–01

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