nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2015‒02‒22
twelve papers chosen by
Arvi Kuura
Tartu Ülikool

  1. On the Failure of R&D Projects By Link, Albert; Wright, Mike
  2. Contractors networks in public procurement projects: The case of the construction industry in the Veneto region By Silvia Rita Sedita; Roberta Apa
  3. Stepwise Investment and Capacity Sizing under Uncertainty By Chronopoulos, Michail; Hagspiel, Verena; Fleten, Stein–Erik
  4. The dark side of R&D collaborations By Enrico Guzzini; Donato Iacobucci
  5. 2013 Clean Energy Investments: Project Summaries By Asian Development Bank (ADB); ; ;
  6. Impact Evaluation of Development Programmes and Policies: Experiences from Viet Nam By Nguyen Viet Cuong
  7. Deployment strategies for FTTH networks and their impact on the business case: A comparison of case studies By Domingo, Albert; Van der Wee, Marlies; Verbrugge, Sofie; Oliver, Miquel
  8. Financing for Infrastructure Investment in G-20 Countries. By Sengupta, Ramprasad; Mukherjee, Sacchidananda; Gupta, Manish
  9. Long-Term Implications of the 2015 Future Years Defense Program By Congressional Budget Office
  10. Waiting for the national broadband network: Challenges of connectivity in regional Australia By Middleton, Catherine; Park, Sora
  11. Were the Hydro Dams Financed by the World Bank from 1976 to 2005 Worthwhile? By Omotola Awojobi; Glenn P. Jenkins
  12. Making Development Co-operation Fit for the Future: A Survey of Partner Countries By Robin Davies; Jonathan Pickering

  1. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Wright, Mike (Imperial College and University of Ghent)
    Abstract: There is an extensive literature on the success/failure of firm-funded R&D projects but growing policy interest focuses on publicly-funded R&D projects. Using data from 1,878 Phase II R&D projects funded through the U.S. Small Business Innovation Research (SBIR) program, of which 624 had been discontinued prior to technical completion, we provide for the first time findings on the success/failure of publicly-funded firm-performed R&D projects. We find that prior R&D experience with the technology being funded by SBIR projects, the amount of the SBIR award, and having a female PI, other factors held constant, is negatively related to the probability of project failure. In contrast, firm size is positively associated with project failure. We discuss the implications of these findings for practice, policy, and further research.
    Keywords: R&D; project failure; innovation; SBIR; public sector
    JEL: L26 O31 O32 O33
    Date: 2015–02–16
  2. By: Silvia Rita Sedita (University of Padova); Roberta Apa (University of Padova)
    Abstract: Our work aims to analyze the inter-organizational relationships of contractors in public procurement projects. We investigate how a firm’s network position affects its performance in public procurement practices, measured as the average value of projects won by the firm. To accomplish this objective, we adopt a social network analysis approach to analyze contractor networks. Our evidence comes from an empirical analysis of the network positions of general contractor firms involved in public procurement projects in the construction industry in the Veneto region from 2008 to 2012. Firm performance is affected by firm partnering practices, which are measured in terms of network centrality indicators. We explore how partnering ability, closeness and brokerage influence firm performance and find that a firm’s partnering ability (i.e., the number of direct firm ties within a public procurement network) is crucial in determining the success of the firm’s public procurement practices. Finally, we propose managerial and policy implications for potential regional development.
    Keywords: construction industry; project organizing; public procurement, social network analysis, firm performance.
    JEL: L14 L74
  3. By: Chronopoulos, Michail (Dept. of Business and Management Science, Norwegian School of Economics); Hagspiel, Verena (Dept. of Industrial Economics and Technology Management, Norwegian University of Science and Technology); Fleten, Stein–Erik (Dept. of Industrial Economics and Technology Management, Norwegian University of Science and Technology)
    Abstract: The relationship between uncertainty and managerial flexibility is particularly crucial in addressing capital projects. We consider a firm that can invest in a project in either a single (lumpy investment) or multiple stages (stepwise investment) under price uncertainty and has discretion over not only the time of investment but also the size of the project. We confirm that, if the capacity of a project is fixed, then lumpy investment becomes more valuable than a stepwise investment strategy under high price uncertainty. By contrast, if a firm has discretion over capacity, then we show that the stepwise investment strategy always dominates that of lumpy investment. In addition, we show that the total amount of installed capacity under a stepwise investment strategy is always greater than that under lumpy investment.
    Keywords: Investment analysis; capacity sizing; flexibility; real options
    JEL: G00 G10 G11
    Date: 2015–02–13
  4. By: Enrico Guzzini (Università degli Studi eCampus); Donato Iacobucci (Università Politecnica delle Marche)
    Abstract: Collaboration with firms and public research institutions (PRI) is expected to raise the innovative performance of firms. Collaboration is also likely to increase the cost of innovation because of leakages of strategic information, appropriability and coordination problems. When collaborating with PRI the latter problem is expected to be stronger thus raising the probability of project failure. The aim of this paper is to investigate if and to what extent collaboration in R&D projects raises the probability of failure: i.e. abandoning or delaying innovative projects. It also aims at verifying if and to what extent the collaboration with PRI increases the likelihood of failure. We use data from the fourth Italian Community Innovation Survey (CIS 4) which collected data for the three-year period 2002-2004. The empirical results support the hypothesis that collaboration significantly impacts the probability of abandoning or delaying innovative projects, thus raising the cost of innovation. Collaboration with PRI does not raise the likelihood of failure more than what observed for the collaboration with other partners. Moreover, delaying is influenced by cost factors (such as the lack of financial resources) and knowledge factors (such as the lack of qualified personnel); abandonment is significantly associated with market factors (such as uncertain demand).
    Keywords: R&D collaboration; project failure; public research institutions
    JEL: O32 L14
    Date: 2014–12
  5. By: Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ;
    Abstract: This report summarizes the investments in clean energy made by the operations departments of the AsianDevelopment Bank (ADB) in 2013, condensing information from project databases and formal reports in an easy-to-reference format. This report was prepared by ADB’s Clean Energy Program which provides the cohesive agenda that encompasses and guides ADB’s lending and non-lending assistance, initiatives, and plan of action for sustainable growth in Asia and the Pacific.
    Keywords: clean energy, energy projects, adb projects, power sector rehabilitation, energy efficiency, solar power, adb operations, investments, sustainable growth, central and west asia department, east asia department, private sector operations department, south asia department, southeast asia department, project summary
    Date: 2014–06
  6. By: Nguyen Viet Cuong
    Abstract: Poverty reduction is one of major goals of development policy of most countries, especially developing ones. To reduce poverty, numerous development programmes have been implemented throughout the world. In recent decades, researchers as well as policy makers have been increasingly interested in impact evaluation of development programmes to improve the effectiveness of the programmes. Vietnam has been very successful in poverty reduction since the economic reform in 1986. The Government of Viet Nam, as well as international and domestic organisations, has implemented numerous targeted programmes to increase people’s welfare. Although increasing attention is paid to impact evaluation of programmes, well-designed impact evaluation of development projects remains very limited. This paper discusses experiences and difficulties in impact evaluation of development programmes in Viet Nam. The findings are expected to be relevant for not only Vietnam but also other developing countries, especially those with a similar socio-economic context as Vietnam.
    Keywords: impact evaluation, impact evaluation experiences, development programs, Vietnam.
    JEL: H43 H40 D04
    Date: 2015–02–10
  7. By: Domingo, Albert; Van der Wee, Marlies; Verbrugge, Sofie; Oliver, Miquel
    Abstract: Although it is clear that the evolution of fixed access networks requires the installation of Fiber-to-the-Home (FTTH) to all households, the business case for deploying such networks is very uncertain. It requires significant upfront investment, while not being assured of sufficient timely revenues to cover for it. Although many studies focus on modeling the costs and forecasting the revenues, limited research deals with how both sides can impact the overall business case. This paper compares different deployment strategies used in current FTTH network rollouts, and examines their impact on the overall business case. Deployment strategies are defined as ways to plan the installation of the network and uptake over time, influenced by a variety of situation-dependent characteristics. By studying the different parameters that allow characterizing and grouping ongoing FTTH projects worldwide, we can analyze what drove the choice for the deployment strategy, and how the latter impacts both cost and revenue side of the business case. The paper concludes that deployments driven by demand are less risky and therefore more sustainable. On the other hand, publicly funded or initiated projects obey to different goals than demand and can be unsustainable if they are not able to engage the planned penetration rates.
    Keywords: Fiber-to-the-Home,techno-economics,business case,deployment strategy
    Date: 2014
  8. By: Sengupta, Ramprasad (Jawaharlal Nehru University); Mukherjee, Sacchidananda (National Institute of Public Finance and Policy); Gupta, Manish (National Institute of Public Finance and Policy)
    Abstract: This study looks into various sources of financing infrastructure and the demands for infrastructure investments and highlights the mismatch between demand and supply of funds for infrastructure financing in India. In order to address this mismatch, and given the constraints of traditional sources of infrastructure finance in India, this paper suggests credit enhancement scheme (CES) as an alternative framework for mobilizing long-term infrastructure finance. It suggests for scaling up CES as one of the options for leveraging global finance for long-term investment in infrastructure projects. The suggested scheme of credit enhancement could be scaled up at the G-20 level for mobilizing finance from sources which were earlier shying away from investing in infrastructure projects (e.g., pension and insurance fund). This study also suggests a possible structure for operationalizing this scheme at the G-20 level. The proposed scheme is not specific to G-20 countries, but could be used by other countries (including developing countries which have low sovereign ratings) to leverage long term finance for infrastructure sector.
    Keywords: Infrastructure finance ; Demand for infrastructure investment ; Credit Enhancement Scheme ; Sovereign risk rating ; G-20 ; India
    Date: 2015–02
  9. By: Congressional Budget Office
    Abstract: CBO projects that the Department of Defense’s plans would cost an average of $47 billion per year more from 2015 through 2021 than would be provided under the limits established by the Budget Control Act. CBO’s estimate of costs for that period is $17 billion per year higher than DoD’s estimate. CBO projects the inflation-adjusted costs of DoD’s plans to grow 1.2 percent per year (on average) from 2015 through 2030.
    JEL: H56 H60 H68
    Date: 2014–11–06
  10. By: Middleton, Catherine; Park, Sora
    Abstract: There is enormous demand for high quality, reliable broadband service in regional Australia. But despite years of planning and promises, significant action to improve access to broadband services has not yet taken place in regional Australia. In fact, following a 2013 change in the federal government, there is now greater uncertainty as to the nature and timing of investment as the government-owned National Broadband Network company (NBN Co) is reviewing its approach and rollout schedule. This paper explores the need for better broadband in regional Australia and outlines the failure of the NBN to deliver improvements in a timely way. It notes that the prospects for immediate improvements in broadband availability in regional Australia are not good. Actions to reduce the politicization of broadband development and to diminish uncertainty in planning, to encourage the inclusion of mobile broadband in infrastructure rollout, and to facilitate more local and regional involvement in planning and funding are likely to improve longer term outcomes.
    Keywords: broadband,availability,regional,Australia
    Date: 2014
  11. By: Omotola Awojobi (Eastern Mediterranean University, North Cyprus); Glenn P. Jenkins (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)
    Abstract: Because hydro dams are complex to design and usually involve long-term planning, they are particularly susceptible to cost and time overruns. The controversy surrounding their development remains an unresolved issue in the energy policy debate. This study re-examines the cost issues associated with a portfolio of 58 dams that were financed by the World Bank from 1976 to 2005. Further, an estimate is made of the value of the benefits produced by these investments to determine the magnitude of economic rates of return for the individual projects and the overall portfolio of dams. Even though this portfolio of dams suffered substantially from cost overruns, the net contribution of these dams has been positive and substantial. The ex-post real economic rate of return for the entire portfolio is estimated to be greater than 14 percent. The important policy implication of this study is that each investment in a hydro dam needs to be appraised taking into consideration the distribution and probabilities of costs that might be incurred as well as the potential benefits. Adequate margins must exist of ex-ante benefits over costs to account for the risks of cost overruns.
    Keywords: Dams, hydropower, cost overrun, investment appraisal, energy policy, World Bank
    JEL: L94 O19 Q25 Q48
    Date: 2015–04
  12. By: Robin Davies; Jonathan Pickering
    Abstract: This paper provides insights into what partner country governments anticipate will be their main development challenges within five to ten years, and into how they expect their relationships with DAC development assistance providers to evolve in order to meet these challenges. Based on results from an OECD-commissioned survey of 40 developing country governments, it finds that demand for development co-operation will remain strong given the economic and environmental challenges that lie ahead. However, the countries surveyed expect DAC providers to shift to a more enabling role in the coming years: providing vital finance, but in support of government-led sector programmes; delivering more and better technical and policy support; and leveraging more private finance. This paper will inform the OECD Development Co-operation Directorate’s ‘Agency of the Future’ project, which seeks to identify how DAC members’ development administrations will need to adapt in order to be fit for purpose in a rapidly changing world.
    Date: 2015–02–04

This nep-ppm issue is ©2015 by Arvi Kuura. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.