nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2011‒08‒09
nine papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. External Ventures: Why Firms Don't Develop All Their Inventions In-house By Russell Thomson; Elizabeth Webster
  2. Efficiency in public procurement in Rural Road Projects of Nepal By Benamghar, Radia; Iimi, Atsushi
  3. Improving aid effectiveness in aid-dependent countries : lessons from Zambia By Monica Beuran; Gaël Raballand; Julio Revilla
  4. Recalibrating Development Co-operation: How Can African Countries Benefit from Emerging Partners? By Myriam Dahman Saidi; Christina Wolf
  5. Energy service companies in China: The role of social networks and trust By Kostka, Genia; Shin, Kyoung
  6. Measuring the contribution of extractive industries to local development : the case of oil companies in Nigeria By Abdou Kâ Diongue; Gaël Giraud; Cécile Renouard
  7. Risk and the role of collateral in debt renegotiation By Neus, Werner; Stadler, Manfred
  9. Entrepreneurial Finance Meets Organizational Reality: Comparing Investment Practices And Performance Of Corporate And Independent Venture Capitalists By Zur Shapira; Gary Dushnitsky

  1. By: Russell Thomson (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia (IPRIA), The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia (IPRIA), The University of Melbourne)
    Abstract: In this paper we consider why firms sometimes choose an external development path for their own inventions, despite the costs of contracting and the risks of opportunistic behaviour and expropriation. We model the probability that firms adopt an external development strategy using survey data from over 2700 Australian inventions. Our results indicate that firms pursue external development strategies in response to perceived project-level risk about the technical feasibility of the invention, especially when suported by confidence in the patent system. Our findings also confirm that small to medium size enterprises, highly leveraged large firms and firms with few co-specialized assets are more likely to pursue an external development strategy.
    Keywords: Outsourcing R&D, managing technological risk, licensing innovation
    JEL: O32 O33
    Date: 2011–07
  2. By: Benamghar, Radia; Iimi, Atsushi
    Abstract: Transport infrastructure is important for economic growth. In Nepal, about 20 percent of rural residents have to spend more than 3 hours to go to the nearest marketplace or agriculture center. Public procurement is an important policy instrument to use resources wisely and efficiently. This paper analyzes a series of policy questions, from procurement design to contract management and project quality assurance. The paper finds that the competition effect is significant. To enhance competition, bidding documents can be distributed free of charge on a website. The bid preparation period can be extended. Security issues are also found to be particularly important to avoid unnecessary cost overruns and project delays. Heavy rainfall and the bidders'low-balling strategy are identified as other factors of project delays. The quality of roads would deteriorate with not only security incidence but also time, precipitation and traffic volume.
    Keywords: Transport Economics Policy&Planning,Government Procurement,Debt Markets,Investment and Investment Climate,Post Conflict Reconstruction
    Date: 2011–07–01
  3. By: Monica Beuran (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, World Bank Country Office in Zambia - LUNWB); Gaël Raballand (World Bank Country Office in Zambia - LUNWB); Julio Revilla (World Bank Country Office in Zambia - LUNWB)
    Abstract: Zambia was a middle-income country when it achieved independence from Great Britain in 1964. After decades of international aid Zambia has become a low-income country, and its per capita GDP is only now returning to the levels it had reached over forty years ago. While aid is far from the only variable at work in Zambia's development, its impact has been questionable. This paper examines the issue of aid effectiveness in Zambia, especially in terms of how the incentive structure faced by donors may lead to decreased accountability and inadequate concern for long-term outcomes, rendering aid less beneficial. The paper concludes by proposing a revised approach to the provision and use of international aid in Zambia, as well as in other aid-dependent countries in Sub-Saharan Africa.
    Keywords: Aid effectiveness, Zambia, donors, projects, aid incentives.
    Date: 2011–07
  4. By: Myriam Dahman Saidi; Christina Wolf
    Abstract: With the recent boost of emerging economies in African economic relations, a different philosophy of development co-operation is progressively gaining momentum. Indeed, there are critical differences in the way development co-operation is provided by traditional and emerging partners. For the latter, aid is only one element of a broader economic engagement toolbox. These new realties on the ground mark a qualitative change in the provision of development co-operation both in terms of sectoral allocation and modalities of delivery, which in turn impacts on outcomes as well as the challenges for the recipient countries. We evaluate concerns often raised in this respect (e.g. the lack of policy conditionality destroying Western efforts to promote better governance) and stress that a new set of challenges emerges for African governments in the light of these different engagement modalities. The challenges for African governments to make the most of the new modes of co-operation could be summarised as follows: i) to define a clear strategy; ii) to ensure maintenance; and iii) to enhance their bargaining position.<BR>L’augmentation des relations économiques entre l’Afrique et les partenaires émergents rend plus claire la différence de concept qui sous-tends la coopération au développement offerte par les partenaires traditionnels et émergeants. Dans la philosophie des partenaires émergents l’aide n’est qu’un élément d’une boite à outils beaucoup plus large. Ces nouvelles réalités de terrains sont la marque d’un réel changement qualitatif dans l’offre de coopération au développement, aussi bien en termes d’allocation sectorielle des ressources que de modalités d’approvisionnement, ce qui a un impact sur les résultats et sur les défis auxquels les pays bénéficiaires auront à faire face. Ce rapport analyse les sujets d’inquiétudes récurrents (comme par exemple l’absence de conditionnalité politique qui pourrait détruire les efforts des partenaires occidentaux pour promouvoir la bonne gouvernance) et souligne l’émergence de nouveaux défis pour les gouvernements africains à la lumière de ces différentes modalités. Afin de tirer tout l’avantage de ces nouveaux modes de coopération les gouvernements africains devront : définir une stratégie explicite, assurer la maintenance et renforcer leur pouvoir de négociation.
    Keywords: development co-operation, emerging partners, coopération pour le développement, partenaires émergeants
    JEL: F21 F3 O16 O19 O55 Q3
    Date: 2011–07
  5. By: Kostka, Genia; Shin, Kyoung
    Abstract: China's energy-service companies (ESCOs) have developed only modestly despite favorable political and market conditions. We argue that with sophisticated market institutions still evolving in China, trust-based relations between ESCOs and energy customers are essential for successful implementation of energy efficiency projects. Chinese ESCOs, who are predominantly small and private enterprises, perform poorly in terms of trust-building because they are disembedded from local business, social, and political networks. We conclude that in the current institutional setting, the ESCO model based on market relations has serious limitations and is unlikely to lead to large-scale implementation of energy efficiency projects in China. --
    Keywords: energy policies,energy service companies (ESCO),social networks,trust,China
    JEL: Q40 Q48 O53
    Date: 2011
  6. By: Abdou Kâ Diongue (UFR SAT - Université Gaston Berger de Saint-Louis Sénégal - Université Gaston Berger de Saint-Louis); Gaël Giraud (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ESCP-Europe - Campus de Paris); Cécile Renouard (ESSEC - ESSEC Business School)
    Abstract: Extractive industries face two main challenges in terms of CSR and poverty reduction : 1) recognize that societal activity is part of their core business ; 2) take part in socio-economic projects that contribute to their stakeholders' empowerment and not only to their living conditions. Based on surveys achieved in Nigeria in 2008, the paper presents two societal performance indices meant to be complementary : the Poverty Exit Index (PEI) and the Relational Capability Index (RCI). We show that, while they have fostered the PEI of the local communities, the development projects of the oil companies had a rather negative impact on their RCI. We then identify key variables that can influence positively the RCI and on which a sensible development policy should focus.
    Keywords: Development indices, capability approach, relational capability, development, poverty, impact assessment.
    Date: 2011–07
  7. By: Neus, Werner; Stadler, Manfred
    Abstract: In his basic model of debt renegotiation, BESTER [1994] argues that collateral is more effective if high risk projects are financed. This result, however, crucially depends on the definition of risk. Using the second-order stochastic dominance criterion introduced by ROTHSCHILD AND STIGLITZ [1970], we show that it is not a project's high risk, induced by a high probability of default, that makes collateral more effective. Instead it turns out that, given the expected return, the probability of default has no impact on the collateral's effectiveness. Moreover, a higher risk of the project caused by a higher loss given default makes the use of collateral even less effective. --
    Keywords: Debt renegotiation,Collateral,Risk,Stochastic dominance
    JEL: D81 D82 G21 G32
    Date: 2011
  8. By: Dave Valliere (Ted Rogers School of Management, Ryerson University)
    Abstract: This article is an investigation into the causes of entrepreneurial alertness, the ability of entrepreneurs to spot new business opportunities in the environment. By drawing from decision theory and schema theory, a model is developed to show how changes in the environment are mediated by entrepreneurial alertness and brought to the situated attention of entrepreneurs for evaluation. Entrepreneurial alertness is seen to be the application of unique schemata that allow the entrepreneur to impute meaning to environmental change that would not be imputed by other managers. It is argued that this arises from differences in schematic richness, schematic association, and schematic priming. These three antecedents may therefore form a basis on which enhanced entrepreneurial alertness can be developed
    Keywords: Entrepreneurship; Entrepreneurial alertness, Opportunity spotting; Growth and innovation; SME development
    JEL: M0
    Date: 2011–03
  9. By: Zur Shapira; Gary Dushnitsky
    Abstract: This paper investigates the effect of compensation of corporate personnel on their investment in new technologies. We focus on a specific corporate activity, namely corporate venture capital (CVC), describing minority equity investment by established-firms in entrepreneurial ventures. The setting offers an opportunity to compare corporate investors to investment experts, the independent venture capitalists (IVCs). On average, we observe a performance gap between corporate investors and their independent counterparts. Interestingly, the performance gap is sensitive to CVCs' compensation scheme: it is the largest when CVC personnel are awarded performance pay. Not only do we study the association between incentives and performance but we also document a direct relationship between incentives and the actions managers undertake. For example, we observe disparity between the number of participants in venture capital syndicates that involve a corporate investor, and those that consist solely of IVCs. The disparity shrinks substantially, however, for a subset of CVCs that compensate their personnel using performance pay. We find a parallel pattern when analyzing the relationship between compensation and another investment practice, staging of investment. To conclude, the paper investigates the three elements of the principal-agent framework, thus providing direct evidence that compensation schemes (incentives) shape investment practices (managerial action), and ultimately investors¡¦ outcome (performance).
    Date: 2011–08

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