nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2009‒01‒03
six papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. The Effects of Experience on Selecting Innovation Projects: Better the Devil You Know By Schmidt, Tobias; Schwiebacher, Franz; Sofka, Wolfgang
  2. Project Financing Versus Corporate Financing Under Asymmetric Information By Miglo, A.
  3. The change climate questionnaire: scale development By Bouckenooghe, D.; Devos, G.; Van den Broeck, H.
  4. Capital-Intensive Projects Induce More Effort Than Labor-Intensive Projects By Amihai Glazer; Stef Proost
  5. South-South Investment in Infrastructure: The Operation of Indian Firms in Developing Countries By Pradhan, Jaya Prakash
  6. Improving Quality in Business Process Outsourcing through Technology By Hongyan Li; Joern Meissner

  1. By: Schmidt, Tobias; Schwiebacher, Franz; Sofka, Wolfgang
    Abstract: Innovation success depends heavily on firm’s ability to set priorities and select the most promising options from its project portfolio before the odds of success or failure become visible and reliable. We ask: What does previous innovation experience tell firms about what not to do in the future? With this in mind, we focus on projects that did not materialise or were abandoned - an important building block for choosing and implementing the “right” projects. We suggest two major learning mechanisms. On the one hand, real options theory suggests a process based on financial data. On the other hand, research on absorptive capacities finds that previous innovation experience translates into superior ability to value, extract and exploit external knowledge. We test both hypotheses on an empirical basis for more than 600 German firms, covering innovation activities in the period 1997 to 2005. Our results indicate congruence between firms’ innovation experience and their project selection patterns. Extensive R&D experience materialises as a stock of knowledge that enables firms to judge projects based on knowledge criteria. Non-R&D innovation experience, stemming from producing and introducing products to markets, resonates as decision-making based on economic factors in the future. Both types of innovation experience appear to generate distinct decision-making capabilities inside the firm which are subsequently exploited in selecting projects for the future.
    Keywords: Project selection, real options, absorptive capacity
    JEL: D83 F23 O31 O32
    Date: 2008
  2. By: Miglo, A.
    Abstract: In recent years financing through the creation of an independent project company or financing by non-recourse debt has become an important part of corporate decisions. Shah and Thakor (JET, 1987) argue that project financing can be optimal when asymmetric information exists between firm's insiders and market participants. In contrast to that paper, we provide an asymmetric information argument for project financing without relying on corporate taxes, costly information production or an assumption that firms have the same mean of return. In addition, the model generates new predictions regarding asset securitization.
    Date: 2008
  3. By: Bouckenooghe, D.; Devos, G.; Van den Broeck, H. (Vlerick Leuven Gent Management School)
    Abstract: On the basis of a step-by-step procedure (see Hinkin, 1998), this article discusses the design and evaluation of a self-report questionnaire (Change Climate Questionnaire) that can be used to gauge the internal context of change, the process factors of change, and readiness for change. The authors describe four studies used to develop a psychometric sound 42-item assessment tool that can be administered in organizational settings. In all, more than 3,000 organizational members from public and private sector companies participated in the validation procedure of the CCQ. The information obtained from the analyses yielded five internal context dimensions, three change process dimensions, and three facets of readiness for change.
    Keywords: change climate assessment, scale development, readiness for change
    Date: 2008–10–28
  4. By: Amihai Glazer (Department of Economics, University of California-Irvine); Stef Proost (Center for Economics Studies, Katholieke Universiteit Leuven)
    Abstract: Central governments often subsidize capital spending by local governments, instead of subsidizing operating expenses or labor-intensive projects. This paper offers one explanation, focusing on the incentive effects for local officials--a local official can more easily shift the cost of optimizing a project to his successor on a labor-intensive project than on a capital-intensive project.
    Keywords: Federalism; Capital subsidies; Transit subsidies
    JEL: H77 H71 L92
    Date: 2008–12
  5. By: Pradhan, Jaya Prakash
    Abstract: Since 1990s South-South investment flows have assumed a considerable significance in the economic relations among developing countries. The host developing countries tend to see the growing FDI flows from co-developing economies as a prospective source of financial capital, skills and technologies useful for their economic development. However, there is clearly a lack of recognition among them about the potential of southern investment in improving their civil, social and industrial infrastructure. A distinction can be made between the two main forms in which developing country firms participate in the infrastructure sector of co-developing countries. The first is the project exports resorted by southern firms in various infrastructure areas like transportation, communication, energy, etc. The second form comprises direct investment operation of southern firms to provide infrastructure services to the end users. India presents a classic example of South-South investment in infrastructure sector with Indian firms consistently expanding their project exports and infrastructure-related FDI activities over the years. In the light of growing size of Indian project exports and infrastructure FDI, this study calls for evolving a holistic policy framework by both home and host developing countries to enhance the potential of such investment for infrastructure development.
    Keywords: FDI; Project Exports; Developing Countries
    JEL: F23 F14 F21 R11
    Date: 2008–08
  6. By: Hongyan Li (Center of Operations Research and Logistics, Aarhus School of Business); Joern Meissner (Department of Management Science, Lancaster University Management School)
    Abstract: Evidence is mounting that Business Process Outsourcing (BPO) is growing at a very rapid rate, a rate even greater than that given by the most optimistic projections. Technological and communication advances have helped the widespread adoption of BPO because of the resulting quality and cost improvements. Although many factors contribute to the quality of Business Process Outsourcing (BPO), Information Technology (IT) is a critical determinant which has not yet been thoroughly analysed and measured. In fact, technology applied to BPO through the adopted software, applications, and platforms has a substantial long-term impact on the whole process, affecting the quality, cost, and associated risks of the operation of the outsourced activities. In this paper, we concentrate on how the technology impacts the quality of BPO. We identify the quality structure of BPO and distinguish the unique quality characteristics which differ from those of the traditional service industries. The quality structure includes the major quality measurement criteria that BPO buyers should consider and BPO service providers should be looking at when offering their services. We discuss how technology enhances the value of BPO from perspectives of enabling and leveraging the values of standardization, automation, integration, flexibility and innovation. In general, to both BPO service providers and customers, quality and technology are each important elements which need to be considered carefully. The quality performance of a BPO service can be measured from six perspectives. We show that these perspectives affected by technology intensively by a series of technical criteria.
    Keywords: Technology, Quality, BPO, E-learning process outsourcing, Recruiting process outsourcing
    JEL: O3
    Date: 2008–08

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