nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2010‒02‒20
five papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Inter-organizational learning in drifting environments - Experiences from a multi-firm software development project By Jarle Hildrum
  2. University-Industry Spillovers, Government Funding, and Industrial Consulting By Richard Jensen; Jerry Thursby; Marie C. Thursby
  3. Memo to the New Digital Agenda Commissioner By Bruno van Pottelsberghe; Reinhilde Veugelers
  4. Generic Utilization Rates, Real Pharmaceutical Prices, and Research and Development Expenditures By Joseph P. Cook; Graeme Hunter; John A. Vernon
  5. Liquidity, Institutional Quality and the Composition of International Equity Flows By Itay Goldstein; Assaf Razin; Hui Tong

  1. By: Jarle Hildrum (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: This paper examines conditions under which organizations can acquire and profitably utilise knowledge generated in joint product development ventures. Past research states that such learning depends on relationships between knowledge accumulation at the level of joint venture and the evolution of knowledge structures in the wider organizational environment. An important argument of this paper is that such relationships might drift abruptly due to unforeseen events taking place during project operation, creating new challenges and opportunities for learning. Drawing upon previous research on project-based learning, the paper proposes a model of interorganizational learning aimed to help managers and researchers visualising links between drift and learning in distributed project contexts. The paper illustrates and assesses the empirical relevance of the analytical framework through a case study of a multi-firm product development project in the European software industry.
    Date: 2010–01
  2. By: Richard Jensen; Jerry Thursby; Marie C. Thursby
    Abstract: This paper presents a theoretical model of faculty consulting in the context of government and industry funding for research within the university, which then frames an empirical analysis of the funding and consulting of 458 individual faculty inventors from 8 major US universities. In the theory, firms realize that they free ride on government sponsored research of the faculty they hire as consultants and faculty realize their university research projects indirectly benefit from their firm experience. The model accounts for faculty quality, project characteristics, faculty share of license revenue from university research, and the university's research support. Empirically we find that government research funding is positively related to consulting, independent of faculty quality. We find that government and industry funding for university research are strategic complements as well as evidence of the ability of universities to leverage their research infrastructure to attract research funding.
    JEL: O31 O34 O38
    Date: 2010–02
  3. By: Bruno van Pottelsberghe; Reinhilde Veugelers
    Abstract: Senior Resident Fellows Reinhilde Veugelers and Bruno van Pottelsberghe provide recommendations for the term of new Digital Agenda Commissioner Neelie Kroes in this supplement to Bruegel's Memos to the New Commission: Europe's Economic Priorities 2010-2015. They argue that Kroes should move past a focus on infrastructure and concentrate more on ICT's potential to contribute to growth in the European Union. This should include a focus on emerging ICT products and services to helpl foster an ICT single market and more public support for R&D and innovation, through tailored programmes designed to aid high-risk innovative projects conceived by new ICT companies.
    Date: 2010–01
  4. By: Joseph P. Cook; Graeme Hunter; John A. Vernon
    Abstract: Generic utilization rates have risen substantially since the enactment of The Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman) in 1984. In the year Hatch-Waxman was enacted, generic utilization rates were 19 percent; in contrast, today, the generic utilization rate is approximately 70 percent. Striking a balance between access to existing medicines and access to yet-to-be-discovered (and developed) drugs, through research incentives, was the principal objective of this landmark legislation. However, given the current rate of generic utilization, it seems plausible, if not likely, that any balance achieved by the 1984 Act has since shifted away from research incentives and towards improved access, ceteris paribus. Among other factors, recent mandatory substitution laws in most states have driven up generic utilization rates. In the current paper, we employ semi-annual data from 1992 to 2008 to examine the link between generic utilization rates and real U.S. prescription drug prices. This link is important because previous research has identified a causal relationship between real drug prices in the U.S. and industry-level R&D investment intensity. We identify a statistically significant, positive relationship between generic utilization rates in the U.S. and real U.S. prescription drug prices. Specifically, we estimate an elasticity of real drug prices to generic utilization rates of -0.15. This finding, when coupled with previous empirical work on the determinants of pharmaceutical R&D intensity, suggests an elasticity of R&D to generic utilization rates of about 0.090. While the magnitude of this elasticity is modest, as theory would predict—the effect of greater generic erosion of brand sales at patent expiration is heavily discounted due to the long time horizon to generic erosion when an R&D project is in clinical development. However, because there has been a very substantial increase in generic utilization rates since 1984, the impact on R&D is nevertheless quite large. We explore this and other issues in the current paper.
    JEL: I11 I18 K0 L0
    Date: 2010–02
  5. By: Itay Goldstein; Assaf Razin; Hui Tong
    Abstract: FDI investors control the management of the firms, whereas FPI investors delegate decisions to managers. Therefore, direct investors are more informed than portfolio investors about the prospects of projects. This information enables them to manage their projects more efficiently. However, if investors need to sell their investments before maturity because of liquidity shocks, the liquidation price they can get will be lower when buyers know that they have more information on investment projects. In this paper we examine the choice between Foreign Direct Investment and Foreign Portfolio Investment at the level of the source country. Based on the Goldstein and Razin model, we predict that (1) source countries with higher expectation of future liquidity problems export relatively more FPI than FDI, and (2) this effect strengthens as the source country’s capital market transparency worsens. To test these hypotheses, we examine the variation of FPI relative to FDI for source countries from 1985 to 2004. Our key variable is the predicted severity of liquidity shock, as proxied by episodes of economy-wide sales of external assets. Consistent with our theory, we find that the predicted liquidity shock has a strong effect on the composition of foreign equity investment. Furthermore, greater capital market opacity in the source country strengthens the effect of the liquidity shock.
    JEL: F23 F3
    Date: 2010–02

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