nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2018‒05‒07
eight papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Hybrid methods in project management : a case study in the banking sector By Alain Labarrère; Jean-François Gueugnon; Marciniak Rolande
  2. Managing International Cooperation Projects for Organizational Capacity Development: A Design-Focused Case Study of the Egypt-Japan University of Science and Technology By Michael Barzelay; Masakatsu Okumoto; Hideki Watanabe
  3. Time-declining risk-adjusted social discount rates for transport infrastructure planning By Kathrin Goldmann
  4. Value for Money framework for managing the renegotiation of Public Private Partnership projects By Anil Kashyap; O. P. Agarwal
  5. Japan’s Experience of Creating Innovation for Smart Cities: Implications for Public Policy for Urban Sustainability By Masaru Yarime
  6. Transfer and adaptation of the DEMIT approach to the Mexican context: elements to reformulate for its effective application By María de Lourdes VÁzquez RascÓn; Miguel Ángel Corona JimÉnez; Adrian Ilinca
  7. The Development of Firm Size and Innovativeness in the Pharmaceutical industry between 1989 and 2010 By Martin Backfisch
  8. Wealth Taxation, Non-listed Firms, and the Risk of Entrepreneurial Investment By Schindler, Dirk

  1. By: Alain Labarrère (IDHE - Institutions et Dynamiques Historiques de l'Economie - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Panthéon-Sorbonne - UP8 - Université Paris 8, Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Jean-François Gueugnon (CEROS - Centre d'Etudes et de Recherches sur les Organisations et la Stratégie - UPN - Université Paris Nanterre); Marciniak Rolande (IDHE - Institutions et Dynamiques Historiques de l'Economie - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Panthéon-Sorbonne - UP8 - Université Paris 8, Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: project management methods fall into two categories. On the one hand, predictive methods offer project management techniques intended to apply to all projects uniformly. And on the other hand, agile methods consist in accepting and embracing change through iterative short cycles. More and more organizations are adopting hybrid methods of project management. This communication is divided into two parts. The first one summarizes the theoretical basis and characteristics of predictive methods, agile methods and hybrid methods. The second one presents a case study of hybridization in the banking sector during the implementation of Basel III regulation and discusses the potential generalization of such a hybrid method.
    Abstract: Les méthodes de management de projet SI se scindent en deux catégories : d'une part, les méthodes prédictives de management de projet qui proposent des techniques censées s'appliquer à l'ensemble des projets de manière uniforme et, d'autre part, les méthodes agiles qui consistent à accepter et à intégrer le changement à travers des cycles itératifs courts. De plus en plus d'organisations adoptent une solution hybride de management de projet. La présente communication s'articule en deux parties. La première partie rappelle les ancrages théoriques et les caractéristiques des méthodes prédictives, des méthodes agiles et des méthodes hybrides. La deuxième partie présente un cas d'hybridation dans le secteur bancaire lors de la mise en oeuvre de la réglementation Bâle III et discute sa généralisation possible.
    Keywords: project management, hybrid methods,banking sector, IS,gestion de projet, méthode hybride, secteur bancaire, SI
    Date: 2017–01
  2. By: Michael Barzelay; Masakatsu Okumoto; Hideki Watanabe
    Abstract: Becoming a more successful society, according to mainstream views about development, depends on strengthening organizations. For this reason, the intent of international development cooperation projects properly includes strengthening partner-organizations. However, development agencies face a decision-dilemma. To strengthen a partner-organization, the development agency needs to participate in its management process. On the other hand, such participation would foreseeably cause the partner-organization to become dependent on the development agency, weakening its capabilities. It is thus rational for a development agency to intervene, and it is rational not to intervene. This paper develops a purposive theory of organization-strengthening international development projects that brings this decision-dilemma to the fore, while also reporting and analyzing a specific case of such projects, named in the paper's sub-title. The design-focused case study shows how this decision- dilemma can be eased through by the use of a well-designed mechanism for participating in the management-process of partner-organizations during project operation. The paper's purposive theorizing and design-focused case study are meant not only to advance professional knowledge about strengthening partner-organizations as part of international development cooperation projects, but also to illustrate an emerging method for advancing professional knowledge about public management, generally.
    Keywords: Developing organisational capacity, Project leadership, development project realization, project monitoring, design-focused case study
    Date: 2018–03
  3. By: Kathrin Goldmann (Institute of Transport Economics, Muenster)
    Abstract: This paper proposes a social discount rate for transport infrastructure project evaluation in Germany that accounts for production efficiency, systematic traffic demand risk, as well as increasing uncertainty in the long-run. The systematic risk in infrastructure planning is measured by the sensitivity of transport volume towards GDP using cointegration analysis. In contrast to the only existing application of this model in transport economics, in this paper the systematic risk for freight transport projects is substantially higher than for passenger transport projects. Due to different systematic risk patterns, the discount rates for freight and passenger transport projects should differ as well, with the former being equal to approximately 3.5% and declining to 2.7% after 50 years, and the latter ranging between 2.0% and the risk-free rate of 1.3%. This paper focuses especially on the econometric challenges of the CAPM-like estimation of systematic risk in public transport infrastructure project assessment and is at the same time the first application to German data.
    Keywords: Social discount rate, Traffic demand risk, Time series analysis, Infrastructure planning, Cost-benefit analysis
    JEL: H43 R42
    Date: 2017–04
  4. By: Anil Kashyap; O. P. Agarwal
    Abstract: India’s Infrastructure sector has witnessed a significant slowdown in the recent past characterised by delay in several projects with some of them becoming unviable due to various reasons such as aggressive bidding, sluggish economy, delays in environmental and regulatory clearances, land acquisition issues, delay in dispute resolution and lack of adequate credit support, among others. This has resulted in massive losses for private infrastructure companies, putting some of them under significant financial stress. While lenders are doing their bit to re-structure the financing arrangement for such projects, renegotiating terms of public-private-partnership (PPP) contracts may prove to be a significant driver to get some of the projects back on track.As a global phenomenon, World Bank (2004) on more than 1,000 PPP projects in Latin America between 1985 and 2000 found that almost 41.5%of all PPP projects had to be renegotiated. The study states that most renegotiated contracts underwent negotiation within two years of their award, and 85%of renegotiations occurred within four years of the initial award of a contract. These facts highlighting renegotiation within such a short period of contract award is indicative of aggressive bidding or faulty contract design.The paper would discuss as the PPP landscape expands and India further establishes itself as a matured PPP market, new challenges and opportunities that will continue to emerge. These include innovative financing techniques to reduce cost to public authorities, improved project delivery techniques that can reduce cost of construction and ensure timely completion of projects meeting the desired quality benchmarks. Besides renegotiation, the government, to ward off allegations or litigation from bidders who lose out in the first stage by creating credible institutional mechanisms.
    Keywords: aggressive bidding; Institutional Mechanisms; Ppp; renegotiation
    JEL: R3
    Date: 2017–07–01
  5. By: Masaru Yarime
    Abstract: In our efforts to promote an urban sustainability, the transformation to smart cities will play a significant role. As smart cities are based on advanced systems of hardware and software—covering various types of products and services relevant to urban functions— innovation for smart cities requires a significant degree of diversity in knowledge, actors, and institutions. Hence it is important to understand the characteristics of the innovation system in smart cities and to introduce policies that will promote forms of innovation that incorporate local conditions and contexts. In this paper, the innovation system of smart cities in Japan is examined to consider implications for public policies and institutional design. The analysis reveals a concentrated structure dominated by large actors, particularly in the public sector and the electric (power generation and distribution) and electronics (appliance and equipment) industries, with knowledge and technological domains concerning renewable energy, energy storage, community energy management, and applications for home appliances and electric vehicles. Policies and regulations influencing the innovation system of smart cities include economic incentives to promote renewable energy technologies, liberalization of energy markets for new entrants, participatory processes of road-mapping on key technologies, localization of demonstration projects reflecting specificities, standard setting for component technologies, and platform creation for stakeholder partnerships including academia, industry, government, and civil society. A key implication for public policy is to facilitate communication and engagement with end users in jointly creating innovation for smart cities.
    Keywords: smart city, innovation system, network analysis, stakeholder collaboration, Japan
    Date: 2018–03
  6. By: María de Lourdes VÁzquez RascÓn (UQAM - Université du Québec à Montréal); Miguel Ángel Corona JimÉnez; Adrian Ilinca (UQAR - Université du Québec A Rimouski)
    Abstract: The DEMIT approach (energy development by modeling and territorial intelligence) was created to respond to citizen requests for transparency and participation in decision-making for the construction of wind farms in the state of Quebec, Canada. To this end, DEMIT articulates four modules where multicriterial analysis and collaborative geographic information systems interact with the knowledge (local or techno-scientific) of the actors involved in a renewable energy project. In an academic and institutional framework, and thanks to bilateral financing, in 2012 a pilot project was carried out to transfer and adapt this approach to the Mexican context. This pilot project is fictitious and exclusively academic.
    Abstract: El enfoque DEMIT (desarrollo energético por modelización et inteligencia territorial) fue creado para dar respuesta a las solicitudes ciudadanas de transparencia y de participación en la toma de decisión para la construcción de parques eólicos en el estado de Quebec, Canadá. Para ello, DEMIT articula cuatro módulos en donde el análisis multicriterio y los sistemas de información geográfica colaborativos interaccionan con los conocimientos (locales o tecno-científicos) de los actores implicados en un proyecto de energía renovable. En un marco académico e institucional, y gracias a un financiamiento bilateral, en 2012 se realizó un proyecto piloto para la transferencia y adaptación de este enfoque al contexto mexicano. Dicho proyecto piloto es ficticio y exclusivamente académico. Palabras clave: energía renovable, impactos socio-ambientales, toma de decisión participativa.
    Keywords: renewable energy,socio-environmental impacts,participatory decision making.
    Date: 2017
  7. By: Martin Backfisch (DHBW CAS)
    Abstract: Within the last decades, there have been many technological and regulatory changes in the pharmaceutical industry. Some of these developments facilitate the innovative activities of large firms, while others foster small firms. It is therefore surprising that the implications of these changes in the pharmaceutical industry have not often been studied empirically. We contribute to the question of firm size and innovativeness in the pharmaceutical industry in presenting a brief review of the literature on innovative activities with a focus on the relation of different firm sizes in the pharmaceutical industry and present own empirical findings. Our results with project data from a broad range of firms show that the innovative activities of small firms measured by the share of their projects on all research projects have been rising strongly between 1989 and 2010. Further, the share of small firms on new drugs has been constantly increasing in this period. On the other hand, project success rates are lowest for small firms, while the rate of projects already discontinued in the preclinical phase is highest for them. We discuss these results and find that the reasons behind these developments are crucial to understand the innovative performance of the industry within the last 20 years.
    Keywords: pharmaceutical R&D; drug development; success rates; firm size
    JEL: O32 L65
    Date: 2018
  8. By: Schindler, Dirk (Dept. of Accounting, Auditing and Law, Norwegian School of Economics)
    Abstract: How to incorporate hard-to-value assets into the wealth tax? We analyze the effect of an optimal wealth tax on risk-taking behavior and welfare when investors do not only have the standard portfolio choice with a well-diversified market portfolio, but can alternatively choose to invest all their wealth into a non-diversifiable, indivisible project. The latter is interpreted as entrepreneurial investment into a small, nonlisted firm for which the actual value is hard to measure and non-verifiable. For such firms, real-world wealth tax systems base the wealth tax on deterministic book values. We show that this tax treatment does not distort the choice of projects if the tax is set optimally with an imputed interest rate on book values, actually larger than the risk-free market rate of return. The market equilibrium and a proportional tax on the market portfolio will ensure an efficient risk allocation between private and public consumption and across projects. Failing to apply an imputed inflation of book values, instead, gives rise to an implicit subsidy on entrepreneurial activity and distorts investment. Our findings also have implications for taxation of hard-to-value assets under capital-gains and inheritance taxation.
    Keywords: Wealth taxation; portfolio choice; non-listed firms; risk diversification; hard-to-value assets
    JEL: D14 G11 H21
    Date: 2018–04–27

This nep-ppm issue is ©2018 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.