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on Project, Program and Portfolio Management |
| By: | Sipos, Gabriela Lucia; Ciurea, Jeanina Biliana |
| Abstract: | The main objective of the financial appraisal of an innovation project is to measure the rentability of those projects. The financial appraisal of an innovation project is similary to investment projects at short level. But on the other side, it has certain features due to its main characteristic activities. |
| Keywords: | appraisal; innovation projects; indexes; efficiency |
| JEL: | O32 |
| Date: | 2009–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15593&r=ppm |
| By: | Michi Nishihara (Graduate School of Economics, Osaka University) |
| Abstract: | This paper derives a preemptive equilibrium in strategic investment in alternative projects. The problem is formulated in a real options model with a multidimensional state variable that represents project-specific uncertainty. The proposed method enables us to evaluate the value of potential alternatives. The results not only extend previous studies with a one-dimensional state variable but also reveal new findings. Preemptive investment takes place earlier and the project value becomes lower if the numbers of both firms and projects increase by the same amount. Interestingly, a strong correlation among profits from projects, unlike in a monopoly, plays a positive role in moderating preemptive competition. |
| Keywords: | strategic real options, preemption, alternative projects, stopping game. |
| JEL: | C73 G13 G31 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0916&r=ppm |
| By: | Berdugo, Binyamin; Hadad, Sharon |
| Abstract: | This paper analyzes the implications of investors' legal protection on aggregate productivity and growth. We have two main results. First, that better investors' legal protection can mitigate agency problems between investors and innovators and therefore expand the range of high-tech projects that can be financed by non-bank investors. Second, investors' legal protection shifts investment resources from less productive (medium-tech) to highly productive (high-tech) projects and therefore enhances economic growth. These results stem from two forces. On one hand, private investors' moral hazard problems (in which entrepreneurs shift investors' resources to their own benefit), and on the other hand innovators' risk of project termination by banks due to wrong signals about projects' probability of success. Our results are consistent with recent empirical studies that show a high correlation between legal investors' protection and the structure of the financial system as well as the economic performance at industry and macroeconomic levels. |
| Keywords: | Banks; private investors protection; growth |
| JEL: | G38 D10 G10 G33 |
| Date: | 2009–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15496&r=ppm |