nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2016‒06‒04
five papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Preliminary Assessment of the Shared Service Facilities By Medalla, Erlinda M.; del Prado, Fatima; Mantaring, Melalyn C.; Maddawin, Angelica B.
  2. Case Studies on Open Innovation in ICT By Alberto Di Minin; Chiara Eleonora De Marco; Cristina Marullo; Andrea Piccaluga; Elena Casprini; Maral Mahdad; Andrea Paraboschi
  3. Determination of Socially Equitable Guarantees for PPPs: A Toll-Road Case from Turkey By Ilker Ersegun Kayhan; Glenn P. Jenkins
  4. Towards Sustainable Growth: Rebuilding the Foundations of the Cyprus Economy By Leslie G. Manison; Savvakis C. Savvides
  5. Contracting for Perennial Energy Crops Under Uncertainty and Costly Reversibility By McCarty, Tanner; Sesmero, Juan; Gramig, Ben

  1. By: Medalla, Erlinda M.; del Prado, Fatima; Mantaring, Melalyn C.; Maddawin, Angelica B.
    Abstract: This paper assesses one of the pillars of the "Big Push" for micro, small, and medium enterprise (MSME) development of the Department of Trade and Industry (DTI): the shared service facility (SSF). Implemented in 2013, SSF seeks to address the gaps and bottlenecks in the value chain of priority industry clusters through the provision of processing and/or manufacturing machinery, equipment, tools, and related accessories for the common use of MSMEs. The assessment used case studies of selected three project sites where focus group discussions (FGDs) were held and preliminary data on output, performance, and costs could be obtained. Overall data from DTI on SSF were also utilized. The results appear promising, although still not robust enough because of insufficient data, and the program being still in early stage (2nd year) of implementation. The project costs very little, but it has had notable and substantial impact on jobs and productivity. This is indicated by the low estimates of the implicit subsidy per worker and generally favorable measure of the benefit-cost ratio of projects undertaken under the program. In addition, the FGDs, on the whole, brought out encouraging feedback from all concerned.
    Keywords: Philippines, micro, small, and medium enterprises (MSMEs), SME development, shared service facility
    Date: 2016
  2. By: Alberto Di Minin (Scuola Superiore Sant'Anna); Chiara Eleonora De Marco (Scuola Superiore Sant'Anna); Cristina Marullo (Scuola Superiore Sant'Anna); Andrea Piccaluga (Scuola Superiore Sant'Anna); Elena Casprini (Scuola Superiore Sant'Anna); Maral Mahdad (Scuola Superiore Sant'Anna); Andrea Paraboschi (Scuola Superiore Sant'Anna)
    Abstract: This report synthesizes the results of 13 case studies on innovative ICT and ICT-enabled companies across Europe. It aims to assess the impact of Open Innovation strategies (OISs) on their innovation processes and to highlight the role played by ICT.
    Keywords: Open Innovation, ICT, Innovation Ecosystem, SMEs, LE
    Date: 2016–05
  3. By: Ilker Ersegun Kayhan (Department of Banking and Finance,Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey); Glenn P. Jenkins (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)
    Abstract: In toll-road projects there is exogenous demand risk. Thus, the government may be required to provide a minimum-traffic guarantee to induce potential private partners to participate. The government must offer the most appropriate level of guarantee while also justifying this controversial fiscal policy tool to society. This study demonstrates the use of financial modeling, risk analysis, and economic evaluation in a toll-road project in Turkey, contributing to the narrowing of a capacity gap in the field. One criterion is proposed to produce a socially equitable guarantee level. This case study exemplifies the policy implications discussed in the conclusions.
    Keywords: Toll-road project, financial modelling, economic evaluation, risk analysis, fiscal policy, Turkey
    JEL: D61 L91 H54 O52
    Date: 2016–06
  4. By: Leslie G. Manison (Central Bank of Cyprus); Savvakis C. Savvides (JDINT’L, Department of Economics, Queen’s University, Canada)
    Abstract: Following the severe financial crisis of 2012/2013 and the subsequent contraction of the Cyprus economy, the authors consider the policies and institutional changes required to regenerate economic growth. It is argued that the crisis emanated largely from the wasteful use of investible funds both in the private and public sectors. The authors contend that only a substantial trend increase in quality public and private investments can produce the sustained economic growth necessary to alleviate the very high levels of unemployment and non-performing loans currently afflicting the economy. Subsequent to an analysis of the factors affecting investment performance, policies are proposed for raising productive investments. These should focus on building a capability to source funds and competently appraise and select investment projects, and also to restructure debt-laden, but potentially profitable enterprises. It is proposed that an institution with expertise in project financing, such as a National Development Finance Agency, be established to disentangle the complex web of the outstanding loans of enterprises and ascertain their viability and repayment capability. Furthermore, through a conversion of debt to equity and by attracting new funds this institution should facilitate potentially viable enterprises to undertake investments. In addition the institution should play a key role in the appraisal and financing of major developmental public sector projects and Public Private Partnerships.
    Keywords: Investment-led growth, institutional capability, project evaluation, public comparator analysis, corporate lending, credit risk.
    JEL: D61 G17 G21 G32 G33 H43
    Date: 2016–07
  5. By: McCarty, Tanner; Sesmero, Juan; Gramig, Ben
    Abstract: This paper addresses the impact that different contracts can have on a farmer’s willingness to grow perennial crops, and both the risk the cost effectiveness of each type. Growing perennial energy crops such as poplar, requires large up front capital costs that are largely irreversible. It is also associated with highly volatile returns that can discourage cultivation. Traditional approaches to predict the entry threshold for a given project, such as NPV or Marshallian entry neglect to account for the uncertain, sunk, and intertemporal nature of these types of problems and thus under-estimate the profitability required for entry (Dixit and Pindyck, 1994). This study addresses this problem by using real options analysis. Higher degrees of uncertainty and irreversibility translate into higher premiums on entry due to the value of waiting for more information. Our results suggest that different contracts can erode some of this premium. This study finds the specific type of contract that would trigger cultivation at the lowest possible cost to the biofuel plant. This study considers three different types of payment (performance, acreage, and cost index) to induce investment into poplar tree cultivation. It solves for the entry and exit net revenue thresholds under multiple levels and payment types, using real options. It then uses this threshold to calculate performance, acreage, and the total payment required for entry on a per ton of biomass basis.
    Keywords: real options, contracting, uncertainty, costly reversibility, Crop Production/Industries, Resource /Energy Economics and Policy, Risk and Uncertainty,
    Date: 2016

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