nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2016‒03‒17
seven papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Analysis of a controversial decision process: the case of the pumped hydro storage power plant Atdorf in Germany By Manuel Baumann
  2. An examination of the factors influencing relationship building and performance in virtual R&D project teams By Nabila Jawadi; Dominique Bonet
  3. Getting the most from public R&D spending in times of budgetary austerity By Reinhilde Veugelers
  4. Endogenous information revelation in a competitive credit market and credit crunch By Yuanyuan Li; Bertrand Wigniolle
  5. Analyzing economic growth: what role for public investment? By Oukhallou, Youssef
  6. Barriers of FDI inflow in venture capital and private equity in the Czech Republic By Božena KadeÅ™ábková; OndÅ™ej PtáÄ ek
  7. From Global Savings Glut to Financing Infrastructure; The Advent of Investment Platforms By Rabah Arezki; Patrick Bolton; Sanjay Peters; Frederic Samama; Joseph Stiglitz

  1. By: Manuel Baumann (IET/CICS.NOVA, Universidade Nova de Lisboa, Faculdade de Ciências e Tecnologia, and ITAS, Karlsruhe Institute of Technology)
    Abstract: A main problem of Renewable Energy Sources (RES) as solar and wind energy, which represent a main pillar of the German energy transition, is that they cannot supply constant power output leading to an increasing demand of backup technologies as pumped hydro storage. This study analyses in the first part the controversial large scale PHS project Atdorf in Germany. On the one hand this project is seen as a prerequisite for a successful energy system transition by the German government. On the other hand there is also a strong local movement opposing the project mainly due to environmental concerns. It is a difficult tightrope walk to immolate to a certain degree local interests of a few to achieve an ostensible higher goal as a sustainable energy system. Simultaneously an interpretative phenomenological analysis (IPA) orientated approach was conducted to understand the interest of the multi-stakeholders involved in this controversial case and contributed to the development of the story viewed by the ones living it. The IPA was conducted in detail for the citizen action groug “Bürgerinitiative (BI) Atdorf) and offered the possibility to gather unexpected insight into the entire decision process. The Atdorf project remains in this sense very controversial and unveils several problems allocated to the entire process of the energy transition in Germany. It highlights how large infrastructural energy projects can become complex due to multiple stakeholder perspectives, beliefs and interests. The example of Atdorf was then used as a base to build a hypothesis for a dynamic behaviour model of the ongoing decision process. It could be concluded that the project is stagnating due to uncertain market conditions caused by increasing shares of public financed RES, missing regulation and clear targets in combination with local protests. This general model was used to develop a qualitative system dynamics model, illustrated by a causal loop diagram (CLD). Aim of the CLD was to identify leverage points that lead to incentives for new energy storage technologies and allow the achievement of a renewable energy based electricity system. Three leverage points have been identified; 1) amount of Renewable energy which is influencing almost all other components of the system including markets, need for balancing, investment decisions etc. 2) development and the composition of electricity whole sale markets have to be adopted including EU-Emission trading system to avoid backfire effects; 3) higher level of coordination of energy policies, regulation and related targets to provide a better frame for decisions. The identified points could be confirmed via interviews conducted with experts from energy economics. Most participants concluded that there is a severe market problem at the moment facing a high acceptance problem regarding large pumped hydro storage projects. In general the conducted research helped to gather a better understanding of complex decision making processes and unveiled the importance of right communication within large infrastructural projects as Atdorf.
    Keywords: Renewable Energy, energy policies, energy transition, Germany
    JEL: D74 D81 O25
    Date: 2015–11
  2. By: Nabila Jawadi; Dominique Bonet
    Date: 2016–02–18
  3. By: Reinhilde Veugelers
    Abstract: Highlights This working paper reviews the evidence on the impact of public R&D spending. The authors first look at the evidence from micro-analysis of the impact of public intervention on private R&D and innovation, with a focus on the latest results from crosscountry micro-research performed within SIMPATIC. To analyse the impact of public R&D on growth, the micro-results on private R&D investment effects are complemented with a macro-perspective. To this end, the authors look at how public R&D performs in affecting GDP growth and jobs in applied macro-models most commonly used in EU policy analysis. They focus particularly on the NEMESIS model in development within the SIMPATIC project. The authors conclude with some policy recommendations from the reviewed micro and macro SIMPATIC evidence for designing public R&D projects and programmes.
    Date: 2016–02
  4. By: Yuanyuan Li (University of Bielefeld - University of Bielefeld, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Bertrand Wigniolle (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: In this paper, we propose a new mechanism able to explain the occurrence of credit crunches. Considering a credit market with an asymmetry of information between borrowers and lenders, we assume that borrowers have to pay a cost to reveal information on the quality of their project. They decide to be transparent if it is necessary for getting a loan or for paying a lower interest rate. Two types of competitive equilibria may exist: an opaque equilibrium in which all projects receive funding without revealing information; a transparent one in which only the best projects reval information and receive funding. It is also possible to get multiple equilibria. Incorporating this microeconomic mechanism in an OLG model, the economy may experience fluctuations due to the change of regime, and indeterminacy may occur.
    Keywords: endogenous information revelation,credit crunch
    Date: 2016–01
  5. By: Oukhallou, Youssef
    Abstract: This paper discusses the role of public investment in the determination of output growth from different theoretical and empirical points of view. The light is shed on the factors that allegedly explain the success and/or the failure of public investment policies in enhancing productivity and supporting GDP, based on a review of empirical evidence in advanced and developing economies. The downstream objective is to provide decision makers with a set of general rules-of-thumb that are likely to help them improve the macroeconomic returns of public investment. The latter are found to be significantly influenced by efficiency and profitability-based selectivity of investment projects. Countries with a relatively low capital-labor ratio usually have higher public and private capital profitability, while the public-private investment substitutability increases the likelihood of crowding out effects. The paper also gives hints on the possible existence of an optimal growth-maximizing level of public investment.
    Keywords: GDP growth, Public Investment, Productivity, Private Investment, Development
    JEL: E62 H54 O40
    Date: 2016–02–13
  6. By: Božena KadeÅ™ábková (Faculty of Civil Engineering, Czech Technical University); OndÅ™ej PtáÄ ek (Faculty of Economics, University of Economics in Prague)
    Abstract: The barriers that negatively affect the PE and VC investment activity in the Czech Republic include the following aspects. Few sources for funds from traditional fund raisers such as pension funds or insurance companies, which is caused mainly by legislative restrictions. Insufficient project quality causes high proportion of transaction cost to investment amount ratio. Insufficient project quality, lack of projects due to little interest from the potential investee companies caused by imperfect information all mean higher risk for investors causing their risk aversion to concentrate mainly on larger projects. Insufficient fundraising conditions lead also to few opportunities for exits. These are the main reasons of the Czech Republic’s little PE and VC market activity, which is limited to 10-20 investments per year in total.
    Keywords: venture capital, asset management, private equity, financial markets, market failure, government failure
    JEL: G24
  7. By: Rabah Arezki; Patrick Bolton; Sanjay Peters; Frederic Samama; Joseph Stiglitz
    Abstract: This paper investigates the emerging global landscape for public-private co-investments in infrastructure. The creation of the Asian Infrastructure Investment Bank and other so-called “infrastructure investment platforms†are an attempt to tap into the pool of both public and private long-term savings in order to channel the latter into much needed infrastructure projects. This paper puts these new initiatives into perspective by critically reviewing the literature and experience with public private partnerships in infrastructure. It concludes by identifying the main challenges policy makers and other actors will need to confront going forward and to turn infrastructure into an asset class of its own.
    Keywords: Infrastructure;Asia;Private investments;Private sector;Savings;Public-private partnership;Privatization;European Investment Bank;World Bank;European Bank for Reconstruction and Development;Infrastructure, Public Private Partnership, Long-term Investors, Savings, and Investment Policy.
    Date: 2016–02–09

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