nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2014‒02‒02
eleven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Policy-Induced Environmental Technology and Inventive Efforts: Is There a Crowding Out? By Hottenrott, Hanna; Rexhäuser, Sascha
  2. The road not taken: competition and the R&D portfolio By Letina, Igor
  3. Financing Patterns of Innovative SMEs and the Perception of Innovation Barriers in Germany By Heike Belitz; Anna Lejpras
  4. Considering Household Size in Contingent Valuation Studies By Ahlheim, Michael; Schneider, Friedrich
  5. Centralized versus Decentralized External Financing, Winner Picking and Corporate Socialism By Löffler, Clemens; Pfeiffer, Thomas
  6. Financing Infrastructure By Luiz de Mello; Douglas Sutherland
  7. Clean-development investments: an incentive-compatible CGE modeling framework By Springmann, Marco; Böhringer, Christoph; Rutherford, Thomas F.
  8. Tracking Under-Reported Financial Flows: China’s Development Finance and the Aid-Conflict Nexus Revisited By Strange, Austin M.; Parks , Bradley; Tierney, Michael J.; Fuchs, Andreas; Dreher , Axel
  9. Sustainable development of Romania through the structural funds By Irimie, Sabin Ioan; Munteanu, Rares
  10. The Political Economy of Local Infrastructure Planning By Leonardo Romeo; Paul Smoke
  11. Educational Infrastructure, School Construction, & Decentralization in Developing Countries: Key Issues for an Understudied Area By Alec Ian Gershberg

  1. By: Hottenrott, Hanna; Rexhäuser, Sascha
    Abstract: Significant policy effort is devoted to stimulate the development, adoption and diffusion of environmental-friendly technology. Sceptics worry about the effects of regulation-induced environmental technology on firms competitiveness. Since innovation is a crucial productivity driver, a potential crowding out of inventive efforts could increase the cost of mitigating environmental damage. Using propensity score matching, we study the short-term effects of regulation-induced environmental technology on non-green innovative activities for a sample of firms in Germany. We find indeed some evidence for a crowding out of the firms R&D and total innovation expenditures net of those costs due to the environmental innovation. The estimated treatment effect is larger for firms that are likely to face financing constraints. No significant effects are observed for the number of R&D projects and investments in non-innovation-related assets. Likewise, for firms with subsidy-backed environmental innovations no crowding out is found. --
    JEL: O33 O31 Q55
    Date: 2013
  2. By: Letina, Igor
    Abstract: This paper develops an innovation model where firms choose which research paths to follow. Contrary to most of the literature which focuses only on the level of investment in innovation, this model captures both the variety of research paths undertaken and the amount of duplication of research. A characterization of the equilibrium market portfolio is provided. It is shown that an increase in the number of firms weakly increases the variety of developed projects and weakly increases the amount of duplication of research. An increase in the intensity of competition among firms leads to an increase in the variety of developed projects and a decrease in the amount of duplication of research. A characterization of the socially optimal portfolio is provided. It is shown under which conditions market suboptimally invests in the variety and duplication of research projects. Market underinvestment in the variety of R&D projects is demonstrated for a large class of homogeneous goods products. --
    JEL: L13 L22 O31
    Date: 2013
  3. By: Heike Belitz; Anna Lejpras
    Abstract: We analyze the role of public support in the financing pattern of R&D in German SMEs and their assessment of financing conditions in the context of other framework conditions for innovation. In Germany, there is a diversity of overall well-funded technology-neutral and technology-specific programs providing grants to R&D and innovation projects. Different types of SMEs access public funding for R&D and innovation activities to varying degrees. Using an extensive sample of 2,700 German SMEs that participated in public R&D promotion programs during the 2005-2010 period, we identify four groups of companies with different patterns of public and private sources of R&D finance, such as own capital, grants, private and subsidized loans. The firms in our sample are generally positive about public financing of R&D in Germany in 2010. Despite the different funding patterns, we find only slight variations in this assessment across the four groups of subsidized SMEs. Nevertheless, medium-sized R&D companies (often with external equity investment) that have to finance the market introduction of innovations without a track record, appear to suffer from deficiencies in the provision of loans. Further, the companies perceive obstacles to innovation primarily in the non-financial sphere, namely the supply of skilled personnel, market regulation and competition conditions. Therefore, future work on innovation policies for SMEs should put greater emphasis on the non-financial external framework conditions for firm R&D and innovative activities.
    Keywords: R&D promotion, financing of R&D, small and medium sized enterprises, barriers to innovation
    JEL: O14 O25 O38 L20
    Date: 2014
  4. By: Ahlheim, Michael; Schneider, Friedrich
    Abstract: In many empirical Contingent Valuation studies one finds that household size, i. e. the number auf household members, is negatively correlated with stated household willingness to pay for the realization of environmental projects. This observation is rather puzzling because in larger households more people can benefit from an environmental improvement than in small households. Therefore, the overall benefit should be greater for larger households. A plausible explanation could be that household budgets are tighter for large families than for smaller families with the same overall family income. The fact that larger families can afford only smaller willingness to pay statements in Contingent Valuation surveys than smaller families with the same income and the same preferences might have consequences for the allocation of public funds whenever the realization of an environmental project is made dependent on the outcome of a Contingent Valuation study. In this paper we show how the use of household equivalence scales for the assessment of environmental projects with the Contingent Valuation Method can serve to reduce the discrimination of members of large families. --
    JEL: D61 H43 Q51
    Date: 2013
  5. By: Löffler, Clemens; Pfeiffer, Thomas
    Abstract: Applying the Monti-Klein framework, we examine the optimal financing strategy of a fi rm that requires funding for individual projects at an imperfect credit market. In particular, we study under which circumstances the firm should raise debt for projects separately (decentralized funding) or jointly (centralized funding) and how this organizational choice af fects the selection and resource allocation among projects. We fi nd that it is optimal to decentralize funding when competition at the credit market and the fi rm s level of equity are both either rather low or rather high. In this case, funding the strongest projects is optimal. For intermediate values of competition and equity, centralized funding is optimal. In this case, bundling strong projects with weak projects can be optimal (corporate socialism). All these funding strategies serve winner picking, i.e. the firm shifts disproportionately more funds to the pro table projects. In contrast to previous literature, winner picking and corporate socialism are not necessarily exclusive; rather, corporate socialism allows winner picking more aggressively. --
    JEL: D21 L13 L22
    Date: 2013
  6. By: Luiz de Mello (Deputy Chief of Staff of the Secretary-General); Douglas Sutherland (OECD)
    Abstract: The need for infrastructure building, replacement and updating is large worldwide and governments - particularly subnational governments - will need to mobilise budgetary resources while simultaneously restoring public finances to sound health and meeting other spending pressures. This paper considers the factors affecting investment in infrastructure (with an emphasis on fixed networks), the specific characteristics of the different financing modalities applicable to subnational governments and highlights the challenges that are specific to subnational governments. In order to rise to the challenge, subnational governments will need to enhance their capacity to raise own revenue, to make the most of intergovernmental grants and transfers, and to mobilise private-sector funds, including by tapping capital markets, where permitted. In order to exploit fully the various financing options, subnational governments in many countries will need to strengthen their technical capacity to design and implement investment projects, as well as manage increasingly complex, multi-year budgets, especially when there is private sector involvement.
    Date: 2014–01–14
  7. By: Springmann, Marco; Böhringer, Christoph; Rutherford, Thomas F.
    Abstract: The Clean Development Mechanism (CDM) established under the Kyoto Protocol allows industrialized Annex I countries to offset part of their domestic emissions by investing in emissions-reduction projects in developing non-Annex I countries. We present a novel CDM modeling framework which can be used in computable-general-equilibrium (CGE) models to quantify the sector-specific and macroeconomic impacts of CDM investments. Compared to conventional approaches that mimic CDM as sectoral emission trading, our framework adopts a micro consistent representation of the CDM incentive structure and its investment characteristics. In our empirical application based on GTAP data we show that incentive compatibility implies that CDM-implementing sectors do not suffer and overall welfare gains tend to be lower than suggested by conventional modeling approaches. --
    JEL: C68 D58 Q56
    Date: 2013
  8. By: Strange, Austin M.; Parks , Bradley; Tierney, Michael J.; Fuchs, Andreas; Dreher , Axel
    Abstract: China’s development finance is sizable but reliable information is scarce. To address critical information gaps, we introduce a new open source methodology for collecting project-level development finance information and create a database of Chinese official finance to Africa from 2000-2011. Our initial data collection efforts found that China’s official finance commitments amount to approximately US$ 73 billion over the 2000-2011 period. We provide details on 1,511 non-investment projects to 50 African countries. We use this database to extend previous research on the aid-conflict nexus. Our results show that sudden withdrawals of “traditional” aid are only more likely to induce conflict in the absence of sufficient alternative funding from China. More broadly, these findings highlight the importance of gathering better data on the development activities of China and other non-traditional donors to better understand the link between foreign aid and conflict.
    Keywords: Development Finance; Foreign Aid; Non-DAC Donors; South-South Cooperation; China; Aid Shocks; Violent Armed Conflict.
    Date: 2014–01–29
  9. By: Irimie, Sabin Ioan; Munteanu, Rares
    Abstract: The degree of EU funds absorption in Romania is not satisfactory. Nevertheless, there are two important aspects to be underlined. In the first place, the projects implemented generate results that are responsive to the objectives of the sustainable development. Then, every project, regardless of the programme, has also horizontal objectives, such as: sustainable development, equality of sexes etc. Thus, every project aims the respect for the environment and the social and economic development of the Romanian society. This paper presents a quantitative analysis of the national and operational programs that contributed to this goal.
    Keywords: sustainable development, structural funds, regional competitiveness
    JEL: R1
    Date: 2013–06
  10. By: Leonardo Romeo (New York University); Paul Smoke (Wagner Graduate School of Public Service)
    Abstract: Developing countries face considerable challenges in the design and operation of local infrastructure planning systems in decentralized or decentralizing countries. Many of these are well documented, but the complex political economy environment in which planning evolves has received insufficient attention. The forces driving decentralization and other public sector reforms shape how planning emerges, functions and performs. Local planning involves a range of differentially empowered and variously motivated actors at multiple levels and in diverse ways. The dynamics among them can support or undermine authentic local planning, with potentially significant implications for results. This paper reviews the evolution of local infrastructure planning with a focus on least developed countries, outlining the key expected and observed relationships among decentralization, planning systems and infrastructure development. The main goal is to create greater awareness of political economy issues that could inform the design and management of more effective and pragmatic local infrastructure planning systems.
    Date: 2014–01–14
  11. By: Alec Ian Gershberg (The New School)
    Abstract: Poor and insufficient school infrastructure negatively impacts student learning and schooling outcomes. Myriad factors have contributed to an infrastructure gap in the education sector in many countries – rapid increases in enrolments, poor maintenance and aging capital stocks, rural to urban migration, and inefficient government planning and school construction to name a few. Various forms of decentralization are likely to be involved both to improve governance and accountability and to foster innovation and cost saving in the school construction industry and investment and project cycle. This paper first discusses why the topic is interesting and worth considering; next we lay out the issues and considerations specific to educational infrastructure decentralization; we then connect the discussion to the broader infrastructure discussions in the other papers as well as to the education decentralization literature. We examine an illustrative case study in Egypt exemplifying both the typical centralization of a national school construction authority, and the reasons for countries to consider certain kinds of decentralization. The case also highlights that school construction reforms involving potential decentralization are a long slog dominated and driven by politics. We provide a framework for un-packaging and considering key components of the processes involved in service provision and some promising strategies relating to decentralization. We conclude with some insights for practitioners and others interested in advancing knowledge of the topic.
    Date: 2014–01–14

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