nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2009‒10‒17
four papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Aligning manufacturing strategy content with heterogeneous requirements By Patricia Deflorin; Maike Scherrer-Rathje
  2. Proximity and the Evolution of Collaboration Networks: Evidence from R&D Projects within the GNSS Industry By Pierre-Alexandre Balland
  3. Risk, Credit, and Insurance in Peru: Field Experimental Evidence By Galarza, Francisco
  4. Some New Evidence on the Role of Collateral: Lazy Banks or Diligent Banks? By Amedeo Argentiero

  1. By: Patricia Deflorin (Institute for Strategy and Business Economics, University of Zurich); Maike Scherrer-Rathje (Institute for Technology Management, University of St. Gallen)
    Abstract: This article expands the existing body of knowledge of manufacturing strategy research as it highlights the influence of context factors on manufacturing strategy content. A sound theoretical foundation is given for the proposition that context factors not only influence competitive priorities but as well the second dimension, the action programs. Whereas various studies showed that companies are in need to compete on multiple competitive priorities simultaneously, research is needed in order to understand how these requirements can be successfully implemented. We find that while the competition on multiple competitive priorities can lead to trade-offs, concerted actions help to minimize the negative effects and can lead to a strong market position. However, the concerted actions have to be aligned to context factors as this influence the success of the action program. Therefore, context factors not only influence the requirement to compete on multiple competitive priorities but define as well which actions are needed in order to gain a strong market position.
    Keywords: Manufacturing Strategy, Practices, Context
    Date: 2009–10
  2. By: Pierre-Alexandre Balland
    Abstract: Increasing attention had been given recently to understand how networks affect organizational performance in innovation studies. Surprisingly, underlying mechanisms of their evolution have been more neglected, and still remain unclear. This lack of interest is denounced today by recent papers which claim that it is a crucial issue for economic geography. Especially the influence of different forms of proximity on the network’s changes needs to be clarified. This paper contributes to this ongoing debate by determining empirically how organizations choose their partners given to their geographical, organizational, institutional, cognitive and social proximity. The relational database is constructed from publicly available information on the R&D collaborative projects of the 6th European Union Framework Program within the navigation by satellite industry (GNSS). Patterns of evolution of the GNSS collaboration network are determined according to a longitudinal study of the relational changes occurred between four consecutive years, from 2004 to 2007. Empirical results show that geographical, organizational and institutional proximity favour collaboration. Inversely, organizations prefer to avoid partnerships when they share a cognitive proximity (same knowledge bases). The last result demonstrates that the kind of project studied does not create a sufficient level of social proximity to stimulate collaboration.
    Keywords: proximity, collaboration networks, innovation, network longitudinal analysis, R&D collaborative projects, SIENA
    JEL: O32 R12
    Date: 2009–10
  3. By: Galarza, Francisco
    Abstract: This paper reports the results of behavioral economic experiments conducted in Peru to examine the relationship amongst risk preferences, loan take-up, and insurance purchase decisions. This area-based yield insurance can help reduce people's vulnerability to large scale covariate shocks, and can also lower the loan default probability under extreme negative covariate shocks. In a context of collateralized formal credit markets, we provide suggestive evidence that insurance may help reduce the fear of losing collateral that prevents potential borrowers from taking loans. Framing these experiments to recreate a real life situation, we started with a Baseline Game where subjects had to choose between a fallback production project and an uninsured loan.We then introduced a third project choice--loan with yield insurance (Insurance Game)--which allows us to measure the effect of introducing insurance on the demand for loans. Overall, more than 50 percent of the subjects are willing to buy insurance in this insurance game. Further, controling for choices made in the baseline game, covariate shocks experienced earlier, and previous rounds' winnings, we find that the decision to take the insured loan (uninsured loan) rather than any of the other two projects is predicted by wealth and lower (higher) levels of risk aversion. Interestingly, this relationship with risk aversion continues to hold when we control for the overweighting of low-probability events observed in the data.
    Keywords: area-yield insurance; credit; covariate risk; idiosyncratic risk; risk aversion; probability weighting; experimental economics; Peru
    JEL: D81 C93
    Date: 2009–08
  4. By: Amedeo Argentiero (University of Rome Tor Vergata - Dept. of Economics and ISAE - Institute for Studies and Economic Analyses)
    Abstract: In the banking literature (Manove et al. (2001)) "Lazy Banks" are defined as those banks that substitute project screening with collateral. This paper aims to test for Italy some empirical implications of the theoretical model of "Lazy Banks": the negative relationship between collateral and project screening, whether collateral is posted by safer borrowers and law enforcement is able to increase the degree of collateralization. Empirical evidence presented here suggests that, both for long-term loans and short-term ones, when project screening increases, the amount of real guarantees with respect to the credit granted increases. Moreover, the data show that collateral seems to be posted by high-risk borrowers and law enforcement does not matter in explaining the presence of real guarantees for long-term loans, whereas it represents a further risk component that generates an increase in collateral for short-term loans. Therefore, a model of "Lazy Banks" does not seem to be verified on the data, suggesting the results rather a sort of "diligence" in the banks' behavior. Furthermore, the empirical findings on our data reveal that the presence of real guarantees is not able to lower ex-post default credit risk. These results are consistent with a view of collateral as a credible mechanism for commitment against informative asymmetries and not as a convenient hedge against realized ex-post credit default risk.
    Keywords: Collateral, Screening, Lazy Banks, Default Risk.
    JEL: D82 G21 H42
    Date: 2009–07

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