nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2015‒06‒27
seven papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Strategic Design under Uncertain Evaluations: Structural Analysis of Design-Build Auctions By Takahashi, Hidenori
  2. Economic Incentives for Carbon Dioxide Storage under Uncertainty: A Real Options Analysis By Daiju Narita; Gernot Klepper
  3. Financing for Development in Support of Biodiversity and Ecosystem Services By Anna Drutschinin; Stephanie Ockenden
  4. Accompanying evaluation of the funding instrument "Spitzencluster-Wettbewerb" (Leading-Edge Cluster Competition) of the federal ministry of education and research. Final report - Summary By Rothgang, Michael; Cantner, Uwe; Dehio, Jochen; Engel, Dirk; Fertig, Michael; Graf, Holger; Hinzmann, Susanne; Linshalm, Enikö; Ploder, Michael; Scholz, Anne-Marie; Töpfer, Stefan
  5. Does cognitive distance affect product development for distant target groups? Evidence from the literature using co-citation methodology By Lew, Jia Hui; Marwede, Malte; Herstatt, Cornelius
  6. Sustainable energy for Development: Access to finance on renewable energy and energy efficiency technologies for Bangladesh By Kundu, Nobinkhor
  7. О формировании системы национального планирования в России By Polterovich, Victor

  1. By: Takahashi, Hidenori
    Abstract: I investigate firms' competition over price and product design under uncertain design evaluations in the context of Design-Build (DB) auctions. Reviewers' design evaluations contain uncertainty from a bidder's perspective, leading luck to curtail differences in firms' chances of winning. I model bidders' behavior and derive semiparametric identification of the model primitives. Uncertain evaluations worsen the expected price of design quality, and exacerbate an auctioneer's uncertainty in auction outcomes. A simple adjustment in the auction mechanism may completely shut down the impact of uncertain evaluations on bidding incentives, restoring efficient allocations of projects.
    Date: 2015
  2. By: Daiju Narita; Gernot Klepper
    Abstract: Carbon dioxide capture and storage (CCS) is considered to be an important option for reducing carbon dioxide (CO2) emissions. However, there are still concerns about its economic viability, especially if the risk of leakage in the storage site is taken into account. We use a real options approach for assessing the impact of uncertainty on the timing and the profitability of CO2 storage projects. We model an investment decision for a storage site under uncertainty about CO2 leaking from the storage site, about the development of carbon prices, and about the cost of investment. The numerical model results show that investment under these uncertainties requires a much larger price for carbon credits for storage than an investment plan ignoring uncertainty would suggest. We also show under reasonable parameter assumptions that the risk for investing in CO2 storage is dominated by the uncertain development of carbon prices, whereas the risk of carbon leakage has little influence on the investment decision
    Keywords: Carbon dioxide capture and storage (CCS), real options analysis, climate policy
    JEL: D81 Q49 Q54
    Date: 2015–06
  3. By: Anna Drutschinin; Stephanie Ockenden
    Abstract: This paper considers the key financing challenges and opportunities for realising both biodiversity conservation and sustainable development objectives. It considers the full range of possible sources, from public and private, domestic and international sources, but has a focus on public resources. The first part of this paper examines trends in bilateral commitments of official development assistance (ODA) targeting biodiversity objectives, drawing on OECD development assistance committee (DAC) creditor reporting system (CRS) statistics. The paper also discusses the effectiveness of these finance flows in achieving long-lasting results. The second part of the paper explores how development co-operation can support partner countries to mobilise and access other sources of finance for biodiversity, through mechanisms such as environmental fiscal reform, payments for ecosystem services, market creation mechanisms for green products, and conservation trust funds. Support can target the development of knowledge, technical skills, and strengthen governance and legal institutions. The paper concludes with suggested areas for further research to gain a deeper understanding of biodiversity-related development finance.
    Keywords: development finance, development co-operation, natural resources management, biodiversity, ecosystem services
    JEL: O2 Q
    Date: 2015–06–20
  4. By: Rothgang, Michael; Cantner, Uwe; Dehio, Jochen; Engel, Dirk; Fertig, Michael; Graf, Holger; Hinzmann, Susanne; Linshalm, Enikö; Ploder, Michael; Scholz, Anne-Marie; Töpfer, Stefan
    Abstract: With its Leading-Edge Cluster Competition (in German: Spitzencluster-Wettbewerb; LECC), the Federal Ministry of Education and Research (Bundesministerium für Bildung und Forschung, BMBF) is supporting innovation clusters in a nationwide contest for the first time. In three rounds, 15 cluster initiatives were selected and provided with funds to support them on their way to becoming international leaders in their field of technology, or, if they already held such a position, to maintain or expand their lead. Through a sustainable mobilisation of regional economic potentials, supporting the strategic development of Leading-Edge Clusters has the goal of increasing growth, securing or creating jobs and enhancing the attractiveness of Germany as a location for innovation and business. The BMBF contracted a project consortium to conduct an accompanying evaluation of the LECC. This consortium consisted of RWI, Essen (project coordination); the Institut für Sozialforschung und Gesellschaftspolitik GmbH (ISG), Cologne; the Chair of Economics/Microeconomics at the Friedrich SchillerUniversity Jena, as well as the JOANNEUM RESEARCH GmbH, Graz. This summary of the final report comprises the main findings of the accompanying evaluation of the LECC for the duration of the project from 11/2008 to 04/2014.
    Date: 2015
  5. By: Lew, Jia Hui; Marwede, Malte; Herstatt, Cornelius
    Abstract: The level of cognitive distance determines how detailed objects, persons or events are mentally construed. The higher the level of cognitive distance between two individuals, the lower the level of detail in mental representation of each other. In product development, a detailed conception of the target group is essential for future product success. Product developers need to establish an accurate mental representation of the user and internalize customer preferences to ensure product usability and/or delivery of adequate services in new product development projects (NPD). Depending on the target group in focus, potential users can be distant in various dimensions. Silver Agers (65+ years of age) can be a distant target group for product developers in terms of age and personal contacts as most developers are too young to fall in the category of Silver Agers. Thus, they have likely taken different life experience paths compared to people of their own age cohort. Management and psychological science refers to this phenomenon as cognitive or psychological distance. Especially for distant target groups (e.g. elderly people or children), cognitive distance between product developers and users might have an impact on the creation of new products/services. Literature in this field, especially within an innovation context, is very scarce. Therefore, this paper analyzes existing research streams and thought schools of cognitive distance literature and their applicability in an innovation context to study implications for NPD. We use co-citation analysis to identify and visualize the different research areas dealing with cognitive distance, and to detect conceptual subdomains applicable for individual relationships between product developers and (distant) target groups. We find eight relevant clusters dealing with cognitive distance in psychology and innovation management-related research papers. Construal level theory stands out as the predominant theoretical foundation of cognitive distance in psychological research. It states that distant persons, objects or events in terms of space, time, social or probability are mentally construed in a more abstract way as opposed to nearer/closer/more likely persons, objects or events. Applied to product developers' mental representation of the actual users, this infers that users of distant target groups are likely to be represented more abstractly compared to proximal target groups, e.g. target groups of similar age. This lesser differentiated view on users could lead to non-optimal solutions in NPD. We thus propose that cognitive distance can have an impact on product development. We discover a knowledge gap on the individual level for innovation management studies, i.e. linking cognitive distance to product development success. We analyze findings from psychological research on individual cognitive distances and find that besides temporal distance, the social dimension of cognitive distance appears to be most relevant for empirical tests in innovation management. To empirically explore and test dimensions of social distance, we argue to utilize established network-theoretic measures, like social capital as a proxy for social distance between product developers and distant target groups. We close with practical suggestions to mitigate adverse effects of cognitive distance for product developers.
    Keywords: cognitive distance,psychological distance,Silver Market,distant target group,innovation management
    Date: 2015
  6. By: Kundu, Nobinkhor
    Abstract: Bangladesh will achieve considerable success in acceleration of economic growth of course need for sustainable energy for development (SED). Renewable or ‘green’ energy is now at forefront of the country’s priorities for environmentally sustainable economic progress. The Power Division under the Ministry of Power, Energy & Mineral Resources (MPEMR) has declared a “Renewable Energy Policy of Bangladesh” and under the Companies Act, 1994, the GoB, is establishing an institution named “Sustainable Energy Development Authority” (SEDA). At present Bangladesh takes the different financing models that have been developed and tested for renewable energy projects in urban and rural communities and energy efficiency improvement projects. Bangladesh Bank (BB) has developed an incentive scheme for concessional refinancing for small solar energy, bio-gas plants and Effluent Treatment Plants (ETP). These are recent initiatives on their part and Banks are yet to take full advantage of such concessional refinance. To analysis primary data collected for used cross sectional study to be considered about allied factors for renewable energy especially solar energy. A structured questionnaire was prepared in the light of the objectives of the study that was filled up by direct interview. The multivariate techniques viz., multiple logistic regression models, will be used to identify the inputs significant for sustainable energy for development in Bangladesh that is accelerating economic growth of a nation. Software packages Eviews - 5.1 have built-in routines to estimate the logit model at the individual level. Logistic regressions have been presented with the dependent variable as an indicator of the probability of being in generate RE and EE. Dependent variables dummy of RE and EE (= 1, if a generate RE and EE is full, otherwise under) have been included. The expected sign of explanatory variables coefficients are positive and or negative respectively. Thus, other things remaining same, if high cost RE/EE technologies up to become low cost, each stakeholder will purchase RE/EE technologies. However, together all the regressors have a significant impact on the log of RE/EE, whose p-value is about 0.0000, which is statistically significant. We are looking at different sources of financing on both RE and EE investment decisions. Overall, financial institutions will aim to create a package that includes the total finance amount and the repayment terms, the interest rate, the repayment schedule and any guarantees or securities. When successful, these new approaches could be capable of triggering the involvement of commercial banks. Point of view of banking and financing institutions and risks associated with renewable energy (RE) and energy efficiency (EE) technologies for sustainable energy for development (SED).
    Keywords: Renewable Energy, Energy Efficiency, Sustainable Development
    JEL: Q26 Q56
    Date: 2014–03–12
  7. By: Polterovich, Victor
    Abstract: We propose to distinguish between two “ideal” types of national planning: the universal and the program planning. The first is aimed at accelerating the balanced development of industries and regions through large-scale investment projects; it requires a hierarchy of specialized planning institutions. The second uses a relatively small number of programs aimed at addressing key economic problems. These programs are worked out by the ministries and agencies, which are also engaged in the current management. In developing countries, national planning tends to be the first type, and in the developed ones, it tends to be the second. In Russia, elements of both types of systems have spontaneously arisen. From them, it is necessary to form a mixed system that would be adequate to the Russian level of development. Its contours are discussed in the paper.
    Keywords: indicative planning, budgeting, industrial policy, national innovation system
    JEL: L52 O21 O25 P11 P21
    Date: 2015–06–20

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