nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2008‒08‒31
six papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Resource Allocation When Projects Have Ranges of Increasing Returns By Bobtcheff, Catherine; Gollier, Christian; Zeckhauser, Richard
  2. Resource Co-specialization, Firm Growth, and Organizational Performance: An Empirical Analysis of Organizational Restructuring and IT Implementations By Kim, Sung Min; Mahoney, Joseph T.
  3. Recent Developments in the Econometrics of Program Evaluation By Imbens, Guido W.; Wooldridge, Jeffrey M.
  4. Public R&D Subsidies and Employment Growth - Microeconomic Evidence from Finnish Firms By Heli Koski
  5. Is Service Innovation Different? By Aija Leiponen
  6. The challenge of measuring innovation in emerging economies' firms: A proposal of a new set of indicators on innovation By Marins, Luciana

  1. By: Bobtcheff, Catherine (Toulouse School of Economics); Gollier, Christian; Zeckhauser, Richard (Harvard U)
    Abstract: A fixed budget must be allocated to a finite number of different projects with uncertain outputs. The expected marginal productivity of capital in a project first increases then decreases with the amount of capital invested. Such behavior is common when output is a probability (of escaping infection, succeeding with an R&D project…). When the total budget is below some threshold, it is invested in a single project. Above this cutoff, the share invested in a project can be discontinuous and non-monotone in the total budget. Above an upper cutoff, all projects receive more capital as the budget increases.
    JEL: C60
    Date: 2008–04
  2. By: Kim, Sung Min (Loyola U Chicago); Mahoney, Joseph T. (U of Illinois at Urbana-Champaign)
    Abstract: This paper examines the effects of co-specialized information technology (IT) on the growth and performance of IT-investing firms as a driver of competitive advantages. By adopting resource-based and dynamic-capability perspectives on firm-specific IT systems, we first identify the mechanisms of resource co-specialization strategy in the process of IT implementation as organizational restructuring and adaptive customization of IT applications into the context of adopting firms. Then, we examine impacts of the resulting co-specialized IT system on organizational performance. Testable hypotheses are developed to investigate how the co-specialization mechanisms of organizational restructuring and IT customization influence firm growth--in terms of the number of employees, value-added, and revenue. We also examine how co-specialization mechanisms of organizational restructuring and IT customization influence project outcomes -- in terms of project referenceability and license extension measures. These empirical tests control for other contextual factors and the endogeneity of decision variables. Using a unique panel data on 334 firms adopting Advanced Planning and Scheduling (APS)applications, we find strong empirical support for the co-specialization hypothesis that strategic choices of using IT co-specialization mechanisms are positively associated with firm growth and with superior project outcomes in the sample firms.
    Date: 2008
  3. By: Imbens, Guido W. (Harvard University); Wooldridge, Jeffrey M. (Michigan State University)
    Abstract: Many empirical questions in economics and other social sciences depend on causal effects of programs or policies. In the last two decades much research has been done on the econometric and statistical analysis of the effects of such programs or treatments. This recent theoretical literature has built on, and combined features of, earlier work in both the statistics and econometrics literatures. It has by now reached a level of maturity that makes it an important tool in many areas of empirical research in economics, including labor economics, public finance, development economics, industrial organization and other areas of empirical micro-economics. In this review we discuss some of the recent developments. We focus primarily on practical issues for empirical researchers, as well as provide a historical overview of the area and give references to more technical research.
    Keywords: program evaluation, causality, unconfoundedness, Rubin Causal Model, potential outcomes, instrumental variables
    JEL: C14 C21 C52
    Date: 2008–08
  4. By: Heli Koski
    Abstract: ABSTRACT : This study empirically explores whether the public financial support for entrepreneurial R&D affects employment growth at the firm level. The data from the Finnish companies suggests that the firms that have received public R&D funding have not generally witnessed any greater employment growth than other companies. However, we find that the public R&D support targeted to the certain types of R&D activities notably contribute to the creation of new jobs : employment in those firms that have received public funding for the R&D projects targeted to the new business areas has clearly grown relatively more than in other companies. The relationship between the firm’s total innovation and employment growth is not statistically significant.
    Keywords: Public R&D subsidies, technology policy, employment growth
    JEL: J23 L10 O33 O38
    Date: 2008–08–20
  5. By: Aija Leiponen
    Abstract: ABSTRACT : This exploratory empirical study compares the determinants of innovation in manufacturing and services through descriptive and regression analyses of sales from innovative products and services. The results suggest that, contrary to earlier research, R&D investments play a positive and significant role in both services and manufacturing. Service firms also benefit from broad strategies of sourcing external information. In contrast, strategic breadth in terms of pursuing multiple different innovation objectives or cooperating with different types of partners appears to have detrimental effects on service innovation. We interpret the latter results through reference to service firms’ R&D and alliance management capabilities : Managing multiple innovation projects or multiple cooperative arrangements is challenging, and some service firms may not have accumulated the requisite managerial capabilities to benefit from these strategies. The available data provide partial support for this conjecture.
    JEL: O31 O32 L8
    Date: 2008–08–22
  6. By: Marins, Luciana (UNU-MERIT)
    Abstract: The traditional indicators on innovation rely on the linear assumption that research leads to development, centring on the measurement of inputs and outputs. Based on the traditional innovation indicators, recent studies focused on the industrial innovation process at Latin America state that nowadays Latin American firms display a passive role at world’s innovative activities, characterised by the lack of firms’ innovative skills. However, these indicators do not seem to be the most appropriate for measuring innovation, especially in emerging economies’ firms. The focus of this paper is to theoretically propose a set of new indicators on innovation that might be more adequate to the reality of firms located in emerging economies, centring on the way innovation activities process takes place within the firms. In order to do so, the paper searches for support from five approaches of the economic theory. The validation of the suggested set of new indicators could shed some light on the understanding of the innovative performance of emerging economies’ firms.
    Keywords: innovation, indicators, economic theory, emerging economies, firms, industrial innovation, enterprises, Latin America
    JEL: L20 M10 M21 O30
    Date: 2008

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