nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2008‒09‒29
six papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Innovation on Demand: Can Public Procurement Drive Market Success of Innovations By Aschhoff, Birgit; Sofka, Wolfgang
  2. Improved project time performance using activity sensitivity and network topology information By M. VANHOUCKE
  3. The L2H2 Auction: Efficiency and Equity in the Assemblage of Land for Public Use Revision 5 By Jonathan Pincus; Perry Shapiro
  4. Modelling and measuring the effects of public subsidies on business R&D: theoretical and econometric issues By Cerulli Giovanni
  5. Efficacy of the Clean Development Mechanism By Geethanjali Selvaretnam; Kannika Thampanishvong
  6. The effect of project schedule adherence and rework on the duration forecast accuracy of earned value metrics By M. VANHOUCKE

  1. By: Aschhoff, Birgit; Sofka, Wolfgang
    Abstract: Public procurement has been at the centre of recent discussions on innovation policy on both European and national levels (e.g., Aho-Report, Barcelona Strategy). It has a large potential to stimulate innovation since it accounts for 16% of combined EU-15 GDP. We embed public procurement for innovation into the broader framework of public policies to stimulate innovation: regulations, R&D subsidies and knowledge infrastructure (i.e. basic research at universities). We synthesize the characteristics of all four instruments based on existing literature and quantitatively compare their effects on innovation success. Our empirical investigation rests upon a survey of more than 1,100 innovative firms in Germany. Our survey puts us in the position to trace all sources of valuable innovation impulses, namely public customers, law and regulations, universities and public funding for R&D. We relate these sources back to innovation success. We find that (non-defense related) public procurement and knowledge spillovers from universities propel innovation success equally. In a second step, we explore whether these effects vary across firms (e.g. size, location, industry). The benefits of university knowledge apply uniformly to all firms. However, public procurement is especially effective for smaller firms in regions under economic stress as well as in distributive and technological services. Based on these findings targeted policy recommendations can be developed.
    Keywords: Innovation policy, public procurement, comparison of instruments, innovation success
    JEL: C34 H32 O38
    Date: 2008
    Abstract: The interest in activity sensitivity from both the academics and the practitioners lies in the need to focus a project manager's attention on those activities that influence the performance of the project. When management has a certain feeling of the relative sensitivity of the various parts (activities) on the project objective, a better management's focus and a more accurate response during project tracking should positively contribute to the overall performance of the project. <br>In the current research manuscript, a simulation study is performed to measure the ability of four basic sensitivity metrics to dynamically improve the time performance during project execution. We measure the use sensitivity information to guide the corrective action decision making process to improve a project's time performance, while varying the degree of management's attention. A large amount of simulation runs are performed on a large set of fictive project networks generated under a controlled design.
    Date: 2008–06
  3. By: Jonathan Pincus (School of Economics, University of Adelaide); Perry Shapiro
    Abstract: The burden of redevelopment projects, whether or not they ultimately benefit the communities in which they are undertaken, is borne disproportionately by those displaced. Neighborhoods are destroyed and residents are made to leave a home they love, compensated only by its market value. The benefits and costs of redevelopment can only be estimated since there are no direct market tests. Here a mechanism, developed as an extension of two recent papers, by Lehavi and Lichts (L2) and by Heller and Hill (H2), provides a market-based efficiency test for a proposed project and a compensation rule that alleviates the disproportionate burden on displaced residents. Assembled property is sold at an auction. The reserve price (the lowest price at which the assembled property will be sold) is set so that all displaced residents receive at least their personal value of their property. A successful bid, one that claims the assembled property, is sufficient proof of efficiency.
    Date: 2008–09
  4. By: Cerulli Giovanni (Ceris - Institute for Economic Research on Firms and Growth, Rome, Italy)
    Abstract: It is the aim of this paper to review the principal econometric models used so far to measure the effect of government’s support to private R&D expenditure; in order to reach this task, we first present a basic theoretical framework to identify the effects of public subsidies on business R&D, going on by extending it to the case of dynamic complementarities and presence of subsidy spillovers. The review of the econometric models, the core of the paper, starts from section 4. We first classify econometric models according to three dimensions: 1. structural (based on a system of equations) and non-structural (based on a reduced-form equation and, possibly, a counterfactual) models; 2. models using the subsidy variable in a continuous or in a binary form; and finally, 3. studies exploiting a cross-section versus a longitudinal (panel data) structure. The final part of the paper is an original contribution providing some guidelines to implement R&D policy evaluation in a dynamic subsidization setting.
    Keywords: business R&D; public incentives; econometric evaluation; dynamic treatment
    JEL: O32 C52 O38
    Date: 2008–06
  5. By: Geethanjali Selvaretnam; Kannika Thampanishvong
    Abstract: The Clean Development Mechanism (CDM) gives the industrialized countries (the Annex I countries) some flexibility in achieving their emission reduction targets under the Kyoto Protocol by allowing them to pay for projects that reduce greenhousegas emissions in the developing countries (the non-Annex I countries). This paper is devoted to evaluate the efficacy of the CDM. We show that, on one hand, the emissions in the non-Annex I country decline because of abatement undertaken by the Annex I country under the CDM; on the other hand, the total emissions may increase because (i) the Annex I country will increase emissions in its own country, and (ii) the non-Annex I country, under some conditions, could crowd out the benefits from the CDM projects by increasing its domestic emissions. In order for the CDM to be more effective, we recommend that only partial credits should be given to the Annex I country that undertakes abatement under the CDM. We also suggest that the authority overseeing the CDM should not allow the CDM projects to be hosted by the non-Annex I country that is more conscious about the environment.
    Keywords: Clean Development Mechanism (CDM), Kyoto Protocol, emission, abatement.
    JEL: D24 Q51 Q54
    Date: 2008–08
    Abstract: Earned Value Management (EVM) in project management integrates cost, schedule and technical performance and allows the calculation of cost and schedule variances, performance indices and forecasts of project cost and schedule duration. The earned value method provides early indicators of project performance to reveal opportunities and/or highlight the need for eventual corrective actions.<br>The introduction of the earned schedule (ES) method in 2003 has led to an increasing attention on the forecast accuracy of EVM to predict a project's final duration. Previous research has shown that the ES method outperforms the more traditional predictive metrics for project duration forecasting.<br>In this paper we critically review and test a novel ES extension, the p-factor approach, to measure schedule adherence based on the traditional earned value metrics. A large set of fictive project networks has been constructed under a controlled design and performance is measured by means of Monte Carlo simulations.
    Date: 2008–06

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