nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2014‒03‒08
seven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Firm-level Innovation Activity, Employee Turnover and HRM Practices – Evidence from Chinese Firms By Tor Eriksson; Zhihua Qin; Wenjing Wang
  2. The Impact of R&D Cooperations on Drug Variety Offered on the Market. Evidence from the Pharmaceutical Industry By Tannista Banerjee; Ralph Siebert
  3. Anatomy of Public-Private Partnerships: Their Creation, Financing, and Renegotiations By Miranda Sarmento, J.; Renneboog, L.D.R.
  4. Crowdfunding, Cascades and Informed Investors By Parker, Simon C.
  5. Working Paper 196 - Uses and Abuses of Per-diems in Africa- A Political Economy of Travel Allowances By Guy Nkamleu; Guy Nkamleu; Bernadette Dia Kamgnia
  6. A Proposed Code to Discipline Local Content Requirements By Cathleen Cimino; Gary Clyde Hufbauer; Jeffrey J. Schott
  7. On the Optimal Social Contract: Agency Costs of Self-Government By Sang-Hyun Kim

  1. By: Tor Eriksson (Department of Economics and Business, Aarhus University, Denmark); Zhihua Qin (Renmin University, China,); Wenjing Wang (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: This paper examines the relationship between employee turnover, HRM practices and innovation in Chinese firms in five high technology sectors. We estimate hurdle negative binomial models for count data on survey data allowing for analyses of the extensive as well as intensive margins of firms’ innovation activities. Innovation is measured both by the number of ongoing projects and new commercialized products. The results show that higher R&D employee turnover is associated with a higher probability of being innovative, but decreases the intensity of innovation activities in innovating firms. Innovating firms are more likely to have adopted high performance HRM practices, and the impact of employee turnover varies with the number of HRM practices implemented by the firm.
    Keywords: Innovation, HRM Practices, Employee Turnover
    JEL: L22 M50 O31
    Date: 2014–02–25
  2. By: Tannista Banerjee; Ralph Siebert
    Abstract: Our study puts special attention to the fact that R&D cooperations in the pharmaceutical industry are formed at different stages throughout the drug development process. We study if the timing to engage in R&D cooperations in the pharmaceutical industry has different impacts on the technology and product markets. Using a comprehensive dataset on the pharmaceutical industry, and estimating a heterogeneous treatment effects model (Heckman et al., 2006) our results show that R&D cooperations formed at the early stages increase the number of R&D projects and the number of drugs launched on the product market. Most interestingly, late stage R&D cooperations significantly reduce the number of drugs launched on the market, even though they increased firms’ activity in the technology markets. This result highlights the fact that firms re-optimize their drug development portfolio to avoid wasteful duplication and cannibalizing the sales of the jointly developed drug in R&D cooperations. Our study show that firms cooperating in late stage collaborations re-optimize their individual drug development portfolios, which significantly reduces the number of drugs offered on the market.
    Keywords: drug development, dynamics, co-development, pharmaceutical industry, product variety, product market competition, Research and Development cooperation
    JEL: L24 L25 L65 D22
    Date: 2014
  3. By: Miranda Sarmento, J.; Renneboog, L.D.R. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: This paper presents the main reasons why public-private partnerships (PPPs) are adopted as well as the possible disadvantages for the public and private sectors. By means of two case studies on bridge construction and railway infrastructure (Fertagus and Lusoponte), we elucidate how a PPP is structured and financed. Furthermore, the two case studies illustrate how the renegotiation processes are conducted when the public-private contracts have to be altered and what determines (un)successful renegotiations.
    Keywords: Public–Private Partnerships;Concessions;Renegotiations;Public Procurement;Project Risk
    JEL: G32 H54 L91
    Date: 2014
  4. By: Parker, Simon C. (Western University, Canada)
    Abstract: Do higher proportions of (a) informed investors and (b) high-quality projects increase the number of good projects that are ultimately financed via crowdfunding? A simple model and simulation reveals the answers to both questions to be: 'not necessarily'.
    Keywords: crowdfunding, new ventures, entrepreneurial finance, startups
    JEL: L26 C63 G23
    Date: 2014–02
  5. By: Guy Nkamleu (International Institute of tropical Agriculture); Guy Nkamleu; Bernadette Dia Kamgnia
    Abstract: An increasing amount of publicspending in Africa is allocated toper-diems as acore instrument ofthe incentive structure. These aremainly given to provide financialincentives to employees in order toincrease their motivation to attendmeetingsor travel for workmissions. Anecdotal as well assystematic evidence from manycountries and projects suggeststhat abuse of per-diemsisbecomingtherule rather thantheexception;whichdistorts the impact ofdevelopment efforts. At a time whenthe efficiency and effectiveness ofpublic spending features high onthe political and developmentagendas, improving the efficiency ofthe management of per-diems couldhaveamajor impact on publicfinances andonattainment ofdevelopment goals. Unfortunatelythis topic has been largelyunexplored and little has beenwritten on the subject. Thispaperexamines the political economy ofper-diems in the African context. Itrevisits the conception of per-diemson the continent, scans the extent towhich per-diems are used andabused, and proposes a conceptualframework that could help tomodelingthe mechanism throughwhich the per-diems paymentinfluences motivations andbehaviors.The paper argues that although perdiems are in many cases justifiedpayment, the current practices aremoving from being part of thesolution to becoming part of theproblem. The analysis illustrateshow the possibilities of earning per-diems negatively influencesprojects and programs design,management decisions, and howemployees spend their time. Allthese have a powerful distortingimpact on development efforts.We propose a conceptualframework which demonstrates thelimits of per-diems as a motivationalfactor for travel missions and drawsimplications for economic theoryand policy. The framework showshow intrinsic motivation is partiallydestroyed when large per-diems arepaid. As the amount of per-diemincreases, the incentive ofintrinsically motivated individualsdecreases while the incentive ofextrinsically motivated onesincreases; explaining for examplewhy paying high per-diem rates fora meeting will increase theprobability of having inappropriatepeople attending. Where publicspirit prevails (intrinsic motivation),using large per-diems incentives toincrease motivation to attendmeeting/workshop comes at ahigher price than suggested bystandard economic theory. That isespecially the case as suchincentives tend to crowd out themost suitable participants. Thepaper concludes by warning againstgeneralized use of per-diems asmotivational factor, and exploresalternatives for a more efficient per-diemssystem.
    Date: 2014–02–27
  6. By: Cathleen Cimino (Peterson Institute for International Economics); Gary Clyde Hufbauer (Peterson Institute for International Economics); Jeffrey J. Schott (Peterson Institute for International Economics)
    Abstract: The global economic crisis in 2008 produced pledges from countries around the world to avoid new barriers to trade and investment. These commitments were largely honored when it came to tariffs and quotas, but not when it came to nontraditional forms of protection, including behind-the-border, nontariff barriers such as local content requirements (LCRs). This Policy Brief analyzes the impact of the widely used requirements that local suppliers of goods, services, and even entire projects be favored. It explains why the steps to prevent such protectionism have been effective and further recommends a new World Trade Organization (WTO) code to constrain the use of LCRs, enhance transparency, expedite dispute resolution, and impose penalties for noncompliance.
    Date: 2014–02
  7. By: Sang-Hyun Kim (University of East Anglia)
    Abstract: In a typical study of political economy, citizens are regarded as principals, and government as agent. This is a modern way of thinking in the sense that classical theorists of democracy such as Jean-Jacques Rousseau and James Madison were more interested in the dual nature of people; they are principals (citizens sharing the sovereign power) and, at the same time, agents (subjects under the laws). Government, in their framework, is an intermediate body which helps people solve their self-control problem. Equipped with tools of modern economics, this paper explores the classical problem to see how economic development and political institutionalization relate to the structure of government and the quality of public sector. In particular, I consider repeated games with a large population and incomplete information, in which players decide whether to sacrifice private consumption to provide public goods. Because both people and the executive of public projects are subject to moral hazard, the people spend resources to monitor the executive and the people themselves. The optimal self-enforcing contract, which can be interpreted as an efficiency upper bound of political systems, is characterized. The analysis of the contract shows that as a country gets more economically developed and politically institutionalized, the agency problem on the people's side becomes negligible, and the citizens' demand for accountable government becomes stronger, in which case the standard principal-agent framework is good enough to describe the political reality.
    Date: 2014–02

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