nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2010‒06‒04
five papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Broadband infrastructure: The regulatory framework, market transparency and risk-sharing partnerships are the key factors By Heng, Stefan
  2. Sharing Risk Through Concession Contracts By Pasquale Lucio Scandizzo; Marco Ventura
  3. Role of Governance and Institutional Environment in Affecting Cross Border M&As, Alliances and Project Financing: Evidence from Emerging Markets By Leonardo Becchetti; Nada Kobeissi
  4. Building Reputation for Contract Renewal: Implications for Performance Dynamics and Contract Duration By Elisabetta Iossa; Patrick Rey
  5. Liquidity Shocks and the Business Cycle By Bigio, Saki

  1. By: Heng, Stefan
    Abstract: Around the globe countries are attempting to forge ahead with the expansion and upgrading of advanced communications networks. In most cases they are setting very ambitious goals with regard to technology and coverage. However, the specific cost structure for broadband projects results in the private-sector-driven, competitive market for network upgrading being primarily focused on densely populated urban areas. By contrast, major progress in rolling out broadband to unserved rural areas will not be made in the foreseeable future without state subsidies. Without having to steer a course towards the return of a monopoly in the telecommunications sector, which would have a detrimental long-term impact, the public sector can in this situation promote sustainable progress in telecommunication by merging projects, entering into risk-sharing partnerships, setting realistic broadband targets, providing essential market information to market participants, offering e-government digital services itself and, on top of that, further enhancing investment incentives with a regulatory framework in a competitive environment.
    Keywords: broadband; telecommunications; Infrastructure; investment; financing
    JEL: L96 K2 H54 O33 O14
    Date: 2010–05–26
  2. By: Pasquale Lucio Scandizzo (Faculty of Economics, University of Rome "Tor Vergata"); Marco Ventura (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: In this paper we model concession contracts between a public and a private party, under dynamic uncertainty arising both from the volatility of the cash flow generated by the project and by the strategic behaviour of the two parties. Under these conditions we derive three notions of equilibrium price and apply the model to a case study for one of the most important concession contracts in Italy.
    Keywords: (S) uncertainty modelling, real option, (B) transportation, (P) risk analysis, concession contract
    JEL: D81 L91 L50
    Date: 2010–05–28
  3. By: Leonardo Becchetti (:Faculty of Economics, University of Rome "Tor Vergata"); Nada Kobeissi (Long Island University, C.W. Post)
    Abstract: The growth in foreign activities has attracted numerous investigations on their flow into various regions of the world. The majority of these inquiries however have tended to focus on activities taking place between U.S.A and Europe, NAFTA countries, countries within Eastern and Central Europe, or within Asia-Pacific nations. There is a scarcity of research examining foreign investment activities in the emerging markets of the Middle East and North Africa (MENA) region. The goal of this paper is to void this gap by analyzing the patterns of such activities in this region. It focuses more specifically on components of foreign investment that are not usually included in the traditional measure of FDI, namely cross border M&As, alliances, and project financing. The paper explores the impact of governance and institutional environment in affecting investment activities in the region. It reports a strong association of economic freedom, property rights, and regulations with multiple proxies of foreign investments in the sample countries.
    Date: 2010–05–28
  4. By: Elisabetta Iossa (Faculty of Economics, University of Rome "Tor Vergata"); Patrick Rey (Toulouse School of Economics)
    Abstract: Due to technological progress, recent performance is often more informative about future performance prospects than is older performance. We incorporate information decay in a career concern model in which performance depends on type and effort and contract renewal is based on the performance record. In contrast with the career concern literature (e.g. Lewis, 1986; RJE), contractors work harder when the project approaches renewal date and when their reputation is better. Productive investment are crowded out by window-dressing effort in late contract periods, but it is boosted in early periods. More frequent contract renewals strengthen reputational effects and result in improved performance if the relative cost of investment is low, but otherwise long-term contracts induce more effort. Our results are corroborated by some empirical studies showing that performance improves as the contract approaches renewal date.
    Keywords: Career concerns, contract renewal and dynamic incentives.
    Date: 2010–05–28
  5. By: Bigio, Saki (Department of Economics, New York University)
    Abstract: This paper studies the properties of an economy subject to random liquidity shocks. As in Kiyotaki and Moore [2008], liquidity shocks affect the ease with which equity can be used as to finance the down-payment for new investment projects. We obtain a liquidity frontier which separates the state-space into two regions (liquidity constrained and unconstrained). In the unconstrained region, the economy behaves according to the dynamics of the standard real business cycle model. Below the frontier, liquidity shocks have the effects of investment shocks. In this region, investment is under-efficient and there is a wedge between the price of equity and the real cost of capital. As with investment shocks, we argue that liquidity shocks are not an important source of business cycle fluctuations in absence of other frictions affecting the labor market.
    Keywords: Business Cycle, Asset Pricing, Liquidity
    JEL: E32 E44 D82
    Date: 2010–05

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