nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2010‒12‒04
seven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. The effects of costly exploration on optimal investment timing By Michi NISHIHARA; Takashi SHIBATA
  2. Mega projects in India Environmental and Land Acquisition Issues in the Road Sector By G. Raghuram; Samantha Bastian; Satyam Shivam Sundaram
  3. Enhancing New Markets Tax Credit pipeline flow: maintaining a continuous deal flow in spite of funding gaps and market volatility By Kevin Leichner
  4. Untersuchung von Innovationsdeterminanten in der deutschen Laser-Industrie By Muhamed Kudic; P. Bönisch; Iciar Dominguez Lacasa
  5. How Can Donors Create Incentives for Results and Flexibility for Fragile States? A Proposal for IDA By Alan Gelb
  6. Household water security through stored rainwater and consumer acceptability: a case study of the Anuradhapura District By Bandara, M. A. C. S.; De Silva, R. P.; Dayawansa, N. D. K.
  7. Is Subsidized Housing in Sustainable Neighborhoods? Evidence from Chicago By Emily Talen; Julia Koschinsky

  1. By: Michi NISHIHARA (Graduate School of Economics, Osaka University); Takashi SHIBATA (Graduate School of Social Sciences, Tokyo Metropolitan University, Statistical Laboratory, University of Cambridge)
    Abstract: This paper investigates a principal-agent model in which an owner (principal) optimizes a contract with a manager (agent) delegated to undertake an investment project. In the model, we explore the effects of costly exploration by which the manager learns the real value of development cost. We show that high exploration cost can lead to a pooling policy not contingent on project type. Further, and more notably, we show that, in the presence of asymmetric information, higher exploration cost leads to wealth transfer from owner to manager and can then play a positive role in preventing a greedy contract by the owner and improving social welfare.
    Keywords: Real Options; Asymmetric Information; Costly Learning; Sequential Investment; Incentive Theory
    JEL: D86 G13 G31
    Date: 2010–11
  2. By: G. Raghuram; Samantha Bastian; Satyam Shivam Sundaram
    Abstract: Mega projects (primarily infrastructure) receive a sizable investment (~10%) of the gross fixed capital formation in India. Environmental clearances and land acquisitions have been the two major reasons for delays in the projects. However, there has been a steady increase in the proportion of projects running on schedule and a sharp decline in the proportion of projects with cost overruns. These accomplishments have been achieved due to better financing, project management, and reform in the regulatory frameworks related to environmental and land acquisition aspects. [W.P. No. 2009-03-07]
    Keywords: Mega projects, investment, India, Environmental, financing
    Date: 2010
  3. By: Kevin Leichner
    Abstract: Kevin Leichner examines New Markets Tax Credit (NMTC) performance during the Great Recession and provides recommendations for maintaining deal flow to support the NMTC project pipeline and overcome financing gaps. Between 2002 and 2009, the Federal government allocated $26 billion worth of NMTC to support community development projects. Based on new data from the respondents to a Winter 2010 Center for Community Development Investments survey as well as three case studies, NMTC stakeholders are finding their NMTC portfolios are outperforming other investments. At the same time, however, their responses also indicate that the Congressional expansion of the program, with larger annual allocations, may exceed the ability of the NMTC industry to provide high-quality investor-backed projects. As a consequence, investor demand for the tax credits has been falling, resulting in lower investor pay-ins and reduced impact in low-income communities. Based on survey responses, case studies, and industry literature, the paper concludes with recommendations for strengthening the program and stimulating demand.
    Keywords: Community development
    Date: 2010
  4. By: Muhamed Kudic; P. Bönisch; Iciar Dominguez Lacasa
    Abstract: Empirical and theoretical contributions provide strong evidence that firm-level performance outcomes in terms of innovativeness can either be determined by the firm’s position in the social space (network effects) or by the firm’s position in the geographical space (co-location effects). Even though we can observe quite recently first attempts in bringing together these traditionally distinct research streams (Whittington et al. 2009), research on interdependent network and geographical co-location effects is still rare. Consequently, we seek to answer the following research question: considering that the effects of social and geographic proximity on firm’s innovativeness can be interdependent, what are the distinct and combined effects of firm’s network and geographic position on firm-level innovation output? We analyze the innovative performance of German laser source manufacturers between 1995 and 2007. We use an official database on publicly funded R&D collaboration projects in order to construct yearly networks and analyze firm’s network positions. Based on information on population entries and exits we calculate various types of geographical proximity measures between private sector and public research organizations (PRO). We use patent grants as dependent variable in order to measure firm-level innovation output. Empirical results provide evidence for distinct effect of network degree centrality. Distinct effect of firm’s geographical co-location to laser-related public research organization promotes patenting activity. Results on combined network and co-location effects confirms partially the existence of in-terdependent proximity effects, even though a closer look at these effects reveals some ambiguous but quite interesting findings.
    Keywords: geographical co-location, network positioning, innovation output
    JEL: O31 O32 L25
    Date: 2010–10
  5. By: Alan Gelb
    Abstract: International Development Association (IDA) donors and others operating a country performance-based allocation system face two difficult problems: how to strengthen incentives to produce and document development results and how to increase flexibility for fragile states. Fragile states have the greatest need for projects, but their projects tend to rate poorly in performance-based allocations systems, which provide little incentive to produce successful projects in fragile states or other countries. [Working Paper No. 227]
    Keywords: International Development Association, country, performance-based, allocation, states
    Date: 2010
  6. By: Bandara, M. A. C. S.; De Silva, R. P.; Dayawansa, N. D. K.
    Abstract: Rainwater harvesting has increased in popularity in Sri Lanka over the past two decades due to the number of water supply projects funded by the government and non-governmental organizations (NGOs). The stored rainwater can provide accessible, reliable, timely and adequate supplies of water to households but there are uncertainties as to safety, in terms of water quality, and consumer acceptability. A study was, therefore, conducted in the Anuradhapura District, in the dry zone, to assess consumer acceptability of stored rainwater for household purposes and to conduct rainwater quality tests in a laboratory. The majority of households in Anuradhapura meet their drinking water requirements from protected wells (59.6 %). Prior to the project, people greatly preferred open wells as a source of domestic water, followed by tubewells, because they believed that water in open wells is of good quality and drinkable. However, stored rainwater has become the priority source now, especially through roof rainwater harvesting (RRWH), which is used during the dry periods. The study revealed that more than 85 % of households use stored rainwater for drinking although some have concerns over the quality and only drink it after boiling. The easy accessibility of water and the assurance by the project team that it is of good quality are the main reasons that people are willing to drink it. The acceptability of stored rainwater for consumption was very high in water-scarce areas and with the increasing distance to the nearest and alternative sources of good-quality water. Of those who felt that they had adequate water, 84 % of the sample households found it adequate in the wet season but only 21 % in the dry season. Water quality analysis revealed that the chemical and physical quality of stored rainwater is within the acceptable range with respect to Sri Lankan Standards, SLS: 614, for potable water quality (SLIS 1983). Other domestic water sources exceeded standards for electrical conductivity, total alkalinity, hardness, ammonium nitrogen, fluorides and total iron. However, stored rainwater was of lower biological quality than other domestic water sources.Length: pp.87-97
    Keywords: Domestic water; Water security; Water harvesting; Water quality; Rural areas; Case studies
    Date: 2010
  7. By: Emily Talen (GeoDa Center for Geospatial Analysis and Computation; Arizona State University); Julia Koschinsky (GeoDa Center for Geospatial Analysis and Computation; Arizona State University)
    Abstract: This article explores the connection between subsidized housing and sustainable urban form. Given the general disconnect between new market-rate housing in sustainable, walkable neighborhoods and affordable housing opportunities, we expect affordable housing to be located in less sustainable locations in terms of proximity to amenities, walkability, street connectivity, density, and diversity of urban form. A rich set of parcel and planning data for the city of Chicago was used to correlate sustainability indicators with the locations of both project- and tenant-based affordable housing programs. Difference-in-means tests and other descriptive statistical analysis suggest that project-based locations (with the exception of CHA family units) actually score above average, especially in terms of accessibility and walkability, albeit it at the cost of concentrated poverty, racial segregation, and crime. In contrast, vouchers are located in less sustainable locations when it comes to accessibility and walkability, although they are in neighborhoods with more diversity and less poverty —and, at lower voucher concentrations, with less segregation and crime— than project units.
    Date: 2010

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