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on Project, Program and Portfolio Management |
| By: | Gondo, Rocío (Bank for International Settlements); Vega, Marco (Banco Central de Reserva del Perú) |
| Abstract: | We analyse the effect of commodity price cycles on firm investment decisions at the project level, by considering the decision to delay, cancel or complete a project as initially announced. In particular, we use logit and duration models of competing risks on a novel dataset of announced investment projects in Peru from different economic sectors. The empirical framework for the timing of investment is motivated by real option models for projects that take time to build, with commodity prices used as a proxy of expected future income and their volatility as a proxy for uncertainty.Our results suggest that both a reduction in commodity prices and an increase in volatility increase the probability to delay investment in the mining sector, with an amplification effect when both simultaneously occur. In other sectors, delays in implementation occur more often in periods of high volatility. Probability regressions under a competing risk framework suggest that higher commodity prices lead to a higher probability of completion in all sectors of the economy. |
| Keywords: | Investment projects, panel logit, Competing Risks. |
| JEL: | E43 E51 E52 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:rbp:wpaper:2017-006&r=ppm |
| By: | Sonali Das; Volodymyr Tulin |
| Abstract: | This paper studies private investment in India against the backdrop of a significant investment decline over the past decade. We analyze the potential causes of weaker investment at the firm level, using both firm-level financial statements and a novel dataset on firms’ investment project decisions, and find that financial frictions have played a role in the slowdown. Firms with higher financial leverage invest less, as do firms with lower earnings relative to their interest expenses. Consistent with the notion of credit constraints leading to pro-cyclical investment, we also find that firms with higher leverage are (i) less likely to undertake new investment projects, (ii) less likely to complete investment projects once begun, and (iii) undertake shorter-term investment projects. |
| Date: | 2017–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/134&r=ppm |
| By: | Bell, Peter |
| Abstract: | The Net Present Value is an important statistic in the evaluation of investment opportunities. Analysts often consider the sensitivity of NPV to different parameters in an economic model, but always seem to consider the NPV of a project at the single instant before the project is launched. This short note introduces the idea of a NPV Profile, which shows how the NPV of a project changes over the life of that project. The note calculates the NPV Profile for a simplified cash flow model and briefly discusses how this statistic can be used to consider returns in possible takeover scenarios. |
| Keywords: | Net Present Value, Project Valuation, Takeovers |
| JEL: | C00 G10 |
| Date: | 2017–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79764&r=ppm |
| By: | Matthew Kehn; Liz Babalola; Todd Honeycutt; Gina Livermore; Annie Doubleday; David Stapleton; Purvi Sevak |
| Abstract: | This report presents findings on Minnesota’s experience implementing the Substantial Gainful Activity (SGA) Project demonstration during the first nine months of operation. The SGA Project targets vocational rehabilitation clients who receive only SSDI, and includes enhanced services designed to improve their employment outcomes. |
| Keywords: | Vocational rehabilitation, Social Security Disability Insurance, disability, employment, random assignment demonstration, Rehabilitation Services Administration |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:b1e7cb8b2c0741fc89ab489ad166ab60&r=ppm |
| By: | Frank Martin; Eric Morris; Todd Honeycutt; Gina Livermore; Annie Doubleday; Purvi Sevak; David Stapleton |
| Abstract: | This report presents findings on Kentucky’s experience implementing the Substantial Gainful Activity (SGA) Project demonstration during the first nine months of operation. The SGA Project targets vocational rehabilitation clients who receive only SSDI, and includes enhanced services designed to improve their employment outcomes. |
| Keywords: | Vocational rehabilitation, Social Security Disability Insurance, disability, employment, random assignment demonstration, Rehabilitation Services Administration |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:8bf325b6b5ca424998a4591af9366f48&r=ppm |