nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2007‒12‒19
seven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Business-Science Research Collaboration under Moral Hazard By Isabel Maria Medalho Pereira
  2. A Comparison of Alternative Procedures for the Selection of the Private Partner in PPP Projects By Nicola Doni
  3. Public-private partnerships in transport By Trujillo, Lourdes; Juan, Ellis; Estache, Antonio
  4. Early development economics debates revisited By Alacevich, Michele
  5. Venture Capitalists, Asymmetric Information and Ownership in the Innovation Process By Fabrizi, Simona; Lippert, Steffen; Norback, Pehr-Johan; Persson, Lars
  6. A new approach to WACC, value of tax savings and value for growing and non growing perpetuities: A clarification By Ignacio Velez-Pareja
  7. Incentives for Interdisciplinary Research By Isabel Maria Medalho Pereira

  1. By: Isabel Maria Medalho Pereira
    Abstract: I analyze, in the context of business and science research collaboration, how the characteristics of partnership agreements are the result of an optimal contract between partners. The final outcome depends on the structure governing the partnership, and on the informational problems towards the efforts involved. The positive effect that the effort of each party has on the success of the other party, makes collaboration a preferred solution. Divergence in research goals may, however, create conflicts between partners. This paper shows how two different structures of partnership governance (a centralized, and a decentralized ones) may optimally use the type of project to motivate the supply of non-contractible efforts. Decentralized structure, however, always choose a project closer to its own preferences. Incentives may also come from monetary transfers, either from partners sharing each other benefits, or from public funds. I derive conditions under which public interventio
    Keywords: collaboration, basic research, applied research, project, firms, universities, partnership governance
    JEL: L21 L24 L31 L33 O31 O32
    Date: 2007–09–07
  2. By: Nicola Doni (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
    Abstract: In this work we compare three alternative procedures aimed at selecting a private partner in PPP projects: i.e. negotiation, auction and competitive negotiation. We show how the suitability of each of these selection mechanisms depends on many economic and institutional factors: e.g. the extent of contractual complexity, the degree of heterogeneity in firm costs, the level of competition, the probability of corruption. The main lesson of the paper is that the adoption of competitive negotiation can improve public welfare only if the institutional framework can ensure both an actual contestability of each contract and a low risk of corruption phenomena.
    Keywords: Auctions, Negotiation, Information Policy, Corruption
    JEL: H57 D44 D82 D73
    Date: 2007
  3. By: Trujillo, Lourdes; Juan, Ellis; Estache, Antonio
    Abstract: This paper summarizes the evidence on the evolution of transport PPPs over the last 15 years or so. In the process, it provides a primer on the associated policy issues, including of the central role of project finance in the implementation of PPP policies and the debates on risk allocation in the design of PPPs. The paper also offers a discussion of the increasingly well recognized residual roles for the public sector in transport, with an emphasis on the regulatory debates surrounding the adoption of PPPs.
    Keywords: Transport Economics Policy & Planning,Debt Markets,Banks & Banking Reform,Access to Finance,
    Date: 2007–12–01
  4. By: Alacevich, Michele
    Abstract: Development economics in its early years created the image of a fierce fight between advocates of contrasting theories or approaches- " balanced growth " vs. " unbalanced growth " or " program loans " vs. " project loans. " This view has the merit to highlight such conflicts in great detail; yet it fails to take into account the reality of development economics as it was practiced in the field. This paper reassesses these old conflicts by complementing the traditional focus on theoretical debates with an emphasis on the practice of development economics.A particularly interesting example is the debate between Albert Hirschman, one of the fathers of the " unbalanced growth " approach, and Lauchlin Currie, among the advocates of " balanced growth " on how to foster iron production in Colombia in the 1950s. An analysis of the positions held by these two economists shows that they were in fact much less antithetical than is usually held and, indeed, were in some fundamental aspects surprisingly similar. Debates among development economists during the 1950s thus must be explained-at least partially-as the natural dynamics of an emerging discipline that took shape when different groups tried to achieve supremacy-or at least legitimacy-through the creation of mutually delegitimizing systemic theories.
    Keywords: Economic Theory & Research,Banks & Banking Reform,Access to Finance,,Labor Policies
    Date: 2007–12–01
  5. By: Fabrizi, Simona; Lippert, Steffen; Norback, Pehr-Johan; Persson, Lars
    Abstract: This paper constructs a model where entrepreneurial innovations are sold into oligopolistic industries and where adverse selection problems between entrepreneurs, venture capitalists and incumbents are present. We first show that aggressive development of a basic innovation by better informed venture-backed firms is used as a signaling device to enhance the sale price of the innovation. We then show that incumbents can undertake early, preemptive, acquisitions to prevent such signaling driven overinvestment, despite the risk of buying a non-productive innovation. Therefore, to exist in equilibrium, venture capitalists must be sufficiently more efficient in selecting innovation projects, otherwise preemptive acquisitions will take place.
    Keywords: venture-backed firm; innovation; signaling; overinvestment; interim development; M&A
    JEL: D21 L2 C7 D82 M13 G24 O3
    Date: 2007–11–15
  6. By: Ignacio Velez-Pareja
    Abstract: In this note we correct the findings reported by Vélez-Pareja and Tham (2005). Although perpetuities are somewhat artificial in the sense that in practice they do not exist, they are relevant because no matter how detailed and complex a forecasted financial plan for a firm or project could be, terminal value usually is calculated as a perpetuity. This terminal value might be a growing or a non growing perpetuity. On the other hand, usually terminal value is a substantial part of the firm value. We examine in detail the proper discount rate for cash flows in perpetuity, the present value of tax savings and the calculation of terminal value, which is the value of the perpetuity. We compare the typical textbook proposals for calculating the value of a perpetuity and we found that there are significant deviations. We compare with the Miller and Modigliani (1961) plowback proposal adopted by Copeland et al. (2000). The findings contradict what is generally accepted in the literature.
    Date: 2007–12–04
  7. By: Isabel Maria Medalho Pereira
    Abstract: This paper is a positive analysis of the driving forces in interdisciplinary research. I take the perspective of a research institution that has to decide how to apply its resources among the production of two types of knowledge: specialized or interdisciplinary. Using a prize mechanism of compensation, I show that the choice of interdisciplinarity is compatible with profit maximization when the requirement for the production is sufficiently demanding, and when the new interdisciplinary field is not too neutral. Productive gains due to complementarities of efforts is the main advantage of interdisciplinary organization.
    Keywords: scientific research, specialization, interdisciplinarity, adaptative-skills, prizes, standards
    JEL: D80 O31 O38
    Date: 2007–05–31

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