nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2012‒05‒15
seven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Optimal Coexistence of Long-Term and Short-Term Contracts in Labor Markets By Inés Macho-Stadler; David Pérez-Castrillo; Nicolés Porteiro
  2. Interregional Cooperation in the Framework Programme: A Gravity Model By Grazia Cecere; Nicoletta Corrocher
  3. Assessing contingent liabilities in public‐private partnerships (PPPs) By Sfakianakis, Emmanouil; Laar, Mindel van de
  4. Multi-agent Interaction in the Problem of Managing Venture Projects By O.A. Malafeyev; O.S. Zenovich
  5. Static Multi-Criteria Model of Investing in Innovative Projects on a Set of Coalitional Partitions By X. V. Grigorieva; Oleg A. Malafeyev
  6. Corporate investment decisions under asymmetric information and uncertainty By Bell, Peter
  7. Results-based lending approaches in social protection and labor : World Bank experiences By Honorati, Maddalena; Rawlings, Laura; Domelen, Julie Van

  1. By: Inés Macho-Stadler; David Pérez-Castrillo; Nicolés Porteiro
    Abstract: We consider a market where firms hire workers to run their projects and such projects differ in profitability. At any period, each firm needs two workers to successfully run its project: a junior agent, with no specific skills, and a senior worker, whose effort is not verifiable. Senior workers differ in ability and their competence is revealed after they have worked as juniors in the market. We study the length of the contractual relationships between firms and workers in an environment where the matching between firms and workers is the result of market interaction. We show that, despite in a one-firm-one-worker set-up long-term contracts are the optimal choice for firms, market forces often induce firms to use short-term contracts. Unless the market only consists of firms with very profitable projects, firms operating highly profitable projects offer short-term contracts to ensure the service of high-ability workers and those with less lucrative projects also use short-term contracts to save on the junior workers wage. Intermediate firms may (or may not) hire workers through long-term contracts.
    Keywords: Moral Hazard, long-term contracts, equilibrium contracts
    JEL: D86 C78
    Date: 2011–05
  2. By: Grazia Cecere; Nicoletta Corrocher
    Abstract: The cohesion across European member states and regions has been constantly promoted by EU science policy. Research networks and collaborations have for long constituted one of the most important vehicles of EU research integration. The presence of EU research funding can influence the collaborative behaviour among member states and, potentially, the integration of Eastern European countries in the European Research Area. However, the efforts of the EU policy to increase the internationalisation of research go hand in hand with strong interactions at the regional level. We estimate the intensity of interregional cooperation of ICT R&D projects by means of a gravity model, examining the variables affecting the strength of bilateral collaborations between different EU regions (NUTS 2 level). The dataset includes 245 NUTS-2 regions and 1635 FP research projects in the domain of the ICT. We compute all the bilateral ties for the 245 regions and we use indicators for the interregional collaboration in research projects that are coherent with the principle of fractional counting. Using the information on the budget allocation of each project by partner/region, we can provide a better account of the strength of the relationship. Geographical distance between the two regions reduces the strength of cooperation, while the individual regions‘ involvement in research projects has a positive effect, as well as the ICT capabilities of the regions in terms of employee and patents in the ICT sector. Interestingly, cooperation between regions belonging to different tiers of EU member states (EU15 and EU27) is weak.
    Date: 2011–09
  3. By: Sfakianakis, Emmanouil (European Securities and Markets Authority (ESMA)); Laar, Mindel van de (UNU-MERIT / MGSoG, Maastricht University)
    Abstract: Public-private partnerships (PPPs) can impose important future cost on the government, which in turn create obligations similar to public debt obligations for financing infrastructure investment. Apart from that, government guarantees, typical in PPP contracts, constitute explicit contingent liabilities. The risk that arises from such guarantees must be transparently valued to assess a country’s fiscal profile. In this study, we aim to show that the notion of a PPP as a (set of) contingent claim(s) can also be used to value the PPP public risk. Valuing contingent claims in this manner is important, as it allows us to compare more carefully different set-ups of a PPP. We introduce and analyse the different scenarios that were at the Chilean government’s disposal for executing a transport infrastructure project. Our findings reveal that, for the first years of a PPP programme, the burden on the surplus or deficit will be less in the case of the PPP compared to typical public investment. Secondly, the net contingent PPP flows constitute the real effect on the deficit and correspondingly on the public debt and weaken the government’s fiscal stance. Finally, we attribute a specific price to the PPP public risk introducing CDS valuation with and without counterparty (government) default.
    Keywords: PPP, Guarantees, Public Finance, CDS valuation
    JEL: H40
    Date: 2012
  4. By: O.A. Malafeyev; O.S. Zenovich
    Date: 2011–09
  5. By: X. V. Grigorieva; Oleg A. Malafeyev
    Abstract: Static multi-criteria problem of investing in innovative projects on a set of coalitional partitions finding means compromise vector (one or more) of investment programs, where each component is an investment program of the corresponding innovative project. The search of compromise vector is made under coalitional interaction of all participants in innovative projects. In the process of solving this problem several game problems with different coalitional partitions are considered. As the principles of optimality, Pareto optimum, Nash arbitration scheme, Shapley value, compromise solution are used.
    Keywords: coalitional games, Pareto optimality, a compromise solution.
    Date: 2011–09
  6. By: Bell, Peter
    Abstract: This paper develops a model to study corporate investment decisions using the principal-agent framework. The model has asymmetric information where the agent knows the true value of the company and the principal does not. The model also has uncertainty where the company is presented an investment opportunity with a certain cost and random benefit. The agent must decide whether they will sell stock to the principal and make the investment. Results show that the information asymmetry imposes a cost on the principal because the agent will forgo some profitable projects or undertake some with expected losses. A procedure for the principal to distinguish undervalued and overvalued companies is presented.
    Keywords: Corporate decision making; issuance of stock; value of investment
    JEL: C70 G30
    Date: 2012–04–16
  7. By: Honorati, Maddalena; Rawlings, Laura; Domelen, Julie Van
    Abstract: This note reviews recent World Bank experience with projects using results-based lending in Social Protection and Labor (SP&L) in preparation for stepped-up engagement under the proposed Program-for-Results (P4R). The P4R is expected to be launched in 2012. Given the already strong use of P4R-type approaches in SP&L, the portfolio focus on sectoral reform as shown from the SP&L results readiness review, and the emphasis on SP&L systems in the new SP&L Strategy, this type of lending instrument is likely to be in high demand by SP&L clients. This note is intended as a resource for task teams in SP&L interested in a quick update on results-based lending in the sector and features two case studies: the Bangladesh Employment Generation Program for the Poorest Project and the Romania Social Assistance System Modernization Project.
    Keywords: Banks&Banking Reform,Debt Markets,Labor Policies,Access to Finance,E-Business
    Date: 2011–10–01

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