nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2022‒05‒23
seven papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Social Capital and the Social Evaluation of Investments By Hatice Jenkins; Glenn P. Jenkins
  2. Voluntary Equity, Project Risk, and Capital Requirements By Andreas Haufler; Christoph Lülfesmann
  3. How Africa Borrows From China: And Why Mombasa Port is Not Collateral for Kenya's Standard Gauge Railway By Brautigam, Deborah; Bhalaki, Vijay; Deron, Laure; Wang, Yinxuan
  4. Assessing Whether Mission-Driven Innovation Makes a Difference: Mission Impossible? Developing a Guiding Framework for the Evaluation of Five Mission Driven Environments for Health in Sweden By Essén, Anna; Wennberg, Karl; Krohwinkel, Anna
  5. Seizing sustainable growth opportunities from carbon capture, usage and storage in the UK By Pia Andres; Ralf Martin; Penny Mealy; Esin Serin; Arjun Shah; Anna Valero
  6. Managing Paradoxical Tensions in a Coopetitive Context Horizontal Multiple-Firm Coopetition By Julien Granata; Katherine Gundolf; Pierre Marques
  7. A Before and After Evaluation of Shared Mobility Projects in the San Joaquin Valley By Rodier, Caroline; Harold, Brian; Zhang, Yunwan

  1. By: Hatice Jenkins (Department of Banking and Finance Eastern Mediterranean University, North Cyprus); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Ontario K7L 3N6, Canada)
    Abstract: One outcome of the existence of social capital in a community is that individuals will take into consideration the welfare of other members of the community. If an investment project is undertaken that causes the poorer members of society to increase their consumption of goods and services to improve the satisfaction of their basic needs, then other members of the community who are not directly affected by the project may also experience an increase in the level of their economic welfare. This approach takes into consideration both the change in the economic welfare of the recipients of the assistance the enhances the satisfaction of basic needs in the community, and also the tastes, preferences, and economic welfare of the rest of the community. These basic needs externality can be created by investments because the project lowers the price of a good or service used to satisfy their basic needs, or by raising the incomes of the poor groups so that they now will buy more of the goods that are used to satisfy their basic needs. This paper develops a theoretical framework for the evaluation of the basic need’s externality created by the investment. It then applies this theoretical framework to the case of a project that proposes to expand the water supply in the south part of the city of Manila. We find that these externalities can be quite important. In this particular case a conservative evaluation of the basic need’s externality leads to a value that is over 4 times as large as the financial shortfall of the project.
    Keywords: social capital, basic needs, economic externalities, investment appraisal
    JEL: D61 D62 H43
    Date: 2021–08–06
  2. By: Andreas Haufler; Christoph Lülfesmann
    Abstract: We introduce a model of the banking sector that formally incorporate a buffer function of capital. Heterogeneous banks choose their portfolio risk, bank size, and capital holdings. Banks voluntarily hold equity when the buffer effect against the risk of default outweighs the cost advantages of debt financing. In the optimum, banks with lower monitoring costs are larger, choose riskier portfolios, and have less equity. Binding capital requirements or levies on bank borrowing are shown to make higher-risk portfolios more attractive. Accounting for banks’ interior capital choices can thus explain why higher capital ratios incentivize banks to undertake riskier projects.
    Keywords: voluntary equity, capital requirements, bank heterogeneity
    JEL: G28 G38 H32
    Date: 2022
  3. By: Brautigam, Deborah; Bhalaki, Vijay; Deron, Laure; Wang, Yinxuan
    Abstract: In December 2018, a leaked letter from Kenya's Auditor General (AG) warned that Kenya Ports Authority's assets-of which Mombasa Port is the most valuable-risked being taken over by China Eximbank if Kenya defaulted on the Standard Gauge Railway (SGR) loans. The rumor that Kenya had used Mombasa Port as collateral for the railway became widely accepted globally as another example of "Chinese debt trap diplomacy". Our research shows why this rumor is wrong. Unpacking this complicated case required expertise in the practice of international contract law, auditing, and commercial project finance. Our scholar-practitioner team's forensic analysis of all available primary documentation, over nearly two years, found significant mistakes in the AG's analysis. The AG's misreading was amplified by media misinterpretations of the project's take-or-pay agreement (TOPA) and its sovereign immunity waiver clause, both common features in international commercial project finance. Instead of a deliberate debt trap, the railway project was carefully and creatively designed to reduce the risks of a sovereign default and enhance the bankability of a project with high costs but significant long-term benefits for Kenya and the region. Our research puts Kenya's SGR in the context of debates over Chinese strategy and African development. We shed new light on how China Eximbank lends to large Belt and Road Initiative (BRI) infrastructure projects - and how African and other governments borrow. And for Kenyans, we provide the explanation that Kenya's government has failed to give: a detailed account of why they can rest easy that China is not going to be seizing their port - or indeed, any port.
    Date: 2022
  4. By: Essén, Anna (Department of Entrepreneurship, Innovation, and Technology); Wennberg, Karl (Dept. of Management and Organization); Krohwinkel, Anna (Leading Health Care)
    Abstract: Background. Mission-driven innovation (MDI) policies are founded on governmental attempts to address fundamental but complex societal challenges. The rationale behind such attempts is typically to influence the directionality of innovation towards addressing the perceived challenge. This report focuses on a particular instance of MDI policy executed by Sweden’s innovation agency, Vinnova: the funding of five so-called “mission-driven environments” (MDEs) in 2019. The policy in question is called ‘Vision-Driven Health’ and was initiated in 2019 to support the establishment of inter-organizational and cross-disciplinary coalitions that work towards a common vision and a long-term systemic transformation within the Swedish health care and life science sector. Aim. The report aims to provide a framework for evaluating five MDEs funded by Vinnova. Vinnova asked us to consider, in particular, the role of eight “Work Principles” (WPs) they recommended the MDEs implement. This report is the result of the first (of two) possible steps in evaluating the five MDEs. The first step is about developing a framework for evaluating MDEs. We hereafter refer to it as a pre-study. A second step would involve actually evaluating the five MDEs based on the framework in this report. Methods. The report is based on selective reviews of relevant literature providing insights about best practices for setting up and governing MDE-like initiatives and possible approaches and challenges to evaluating such initiatives. We also collected empirical data about how the five Swedish MDEs operationalized the principles. We surveyed members of the participating MDEs, asking them what a meaningful evaluation could imply from their perspectives. Finally, we consulted a group of external experts on three occasions. Findings. At an overall level, the Vinnova-recommended WPs partly align with practices recommended in the relevant literatures. However, the WPs are formulated abstractly and implemented heterogeneously by the five MDEs. We argue that this heterogeneous implementation is necessary for the MDEs to progress towards their visions but complicates a uniform set of evaluation principles. The MDEs also prioritize the WPs differently, and we observed an additional set of informal WPs. The literature consists primarily of normative studies defining MDI and its relevance and studies that discuss sets of challenges tied to evaluating MDI policies and initiatives. Empirical studies and evaluations remain scarce. Suggestions. Drawing on insights from the literature, we outline a framework for formative and summative evaluation that could be used to evaluate the MDEs and the WPs with which they are set to work. We specifically argue for combining contribution and attribution approaches to evaluation, which could include the following steps: Formative Evaluation Steps (A) If and to what extent the MDE is justified due to a “failure” of the system, market, or current development direction; (B) If and how the MDE’s governance arrangements are purposeful, consistent, and coherent (processes and structures; i.e., ways of working and formalized routines, standards, decisions, and rules); (C) If and how there is a “match” between the MDE’s interventions and identified barriers (weaknesses, bottlenecks, impeding regulations, social norms, etc.). Formative and Summative Evaluation Step (D) If and how the targeted overarching sociotechnical system/field demonstrates improved performance, such as capabilities (system functions and interactions like knowledge sharing), transition processes, and outcomes. Summative Evaluation Steps (E) If and how the targeted overarching sociotechnical system/field exhibits structural changes, such as a change in the types of innovations, new forms of cross-sectorial collaborations, or new networks constellations in the system, because of the MDE; (F) If and to what extent there is measurable impact on the societal level in terms of mitigating the failure addressed and reaching the MDE’s “vision” or “mission.” For evaluating specific MDEs, we conclude that the formative Steps B and C (and after the MDEs have been in operation for some time, Steps D and E, which also are discussed in the report) are of utmost relevance. Step A is a policy-mix decision, and Step F is an evaluation of the overall policy). For Steps B through E, we detail how an evaluation could be done and the type of data needed and exemplify useful methods for each evaluation step. Continuous Evaluations For Step B (governance arrangements), we suggest that evaluations focus on: Are the WP formulated necessary and sufficient for MDEs? Are some WPs more important than others to achieve the expected process outcomes? How do MDEs develop routines and decision rules to operationalize the WPs, and what are the results of their progress? For Step C, we suggest that each MDE evaluate the “match” between the interventions and initiatives they initiate and the barriers to reaching the vision they identified. This involves assessing whether an MDE seems to contribute to eliminating or diminishing the power of bottlenecks in a sociotechnical system. Ideally, this should focus on the most crucial bottlenecks. This step is a necessary precursor to evaluating whether the MDE spurs the emergence of new, needed functions in the sociotechnical system (Steps D and E). This type of evaluation must be (a) conducted on an ongoing basis and (b) handled or coordinated by the MDEs because identifying barriers to their goals and launching initiatives to address such barriers are, in fact, their raisons d’être. Ex Post Evaluations Summative and attribution-oriented evaluation steps aim to assess outcomes and the degree to which an MDE reached its goals. This implies a “working backwards” approach, where observable changes are reviewed, followed by an analysis of whether they can be linked causally to an MDE intervention/activity. Here we suggest evaluating whether and how the targeted sociotechnical system(s) demonstrates improved performance (formative/summative evaluation Step D) and whether the system exhibits any structural changes that facilitate reaching the vision (summative evaluation Steps E and F). Ideally, such evaluations should be conducted ex post the current MDE initiatives because systematic change often takes years to accrue. As such, these types of evaluations instead should be conducted by the policy actor or external evaluators working on their behalf, not the MDEs. Considerations. The MDEs in focus are similar in having received funding (relatively small relative to other MDI initiatives globally) from Vinnova and being instructed to implement eight WP. However, the MDEs also were given agency in determining what challenges to focus on, how to design their vision, and how to implement the WP. We show that the MDEs exhibit great differences in these regards, which has logical consequences for designing an evaluation approach that is useful for all five. Thus, we caution against assessing the MDEs uniformly on all WPs or mere “vision attainment.” Instead, we argue that an evaluation of the MDEs also needs to assess the WPs; that is, it should evaluate the policy design of the overall MDE program. Finally, a prerequisite for addressing multiple and diverse stakeholders’ needs is to gain their trust. Stakeholders who are more engaged with and understand the evaluation’s wider purposes are less inclined to feel “threatened” and will impart more useful and meaningful information. Thus, we argue for actively involving the MDEs in the evaluation steps (especially Step C, which is a tool to actively help them prioritize, document, and evaluate the actions and initiatives they take) and, whenever needed, organize external expert panels to assist them in this work.
    Keywords: Mission-driven Innovation; innovation policy; healthcare; evaluation; grand challenges
    JEL: E61
    Date: 2022–05–03
  5. By: Pia Andres; Ralf Martin; Penny Mealy; Esin Serin; Arjun Shah; Anna Valero
    Abstract: Seizing opportunities from the CCUS value chain can be part of an economy-wide, net-zero-aligned growth path in the UK. The UK has responded to the climate emergency facing the world with an economy-wide target to reach net-zero emissions by 2050. The current decade is critical to ensure coordinated investments in infrastructure, innovation and skills reorient the UK economy towards a net-zero-aligned growth path. As a technological solution for addressing some of the most challenging emissions, CCUS needs to be deployed urgently in the UK and globally, which implies a rapid growth trajectory for the demand for CCUS-related technologies, products and services. The Government's current stated ambition is to capture 10 million tonnes of carbon dioxide (MtCO2) a year by 2030. To meet net-zero, this needs to be ramped up significantly. There are projects already in early development stages across the UK that together could deliver double that capacity in the 2020s. An inconsistent policy environment, including two failed major demonstration competitions, has been the primary setback against CCUS development in the UK to date. Now is the time to make up for years of stalled progress in deploying this essential technology. What's more, fast, strategic action can unlock growth opportunities along the way. Focus should be on areas where the UK has or can build comparative advantage, crucially by capitalising on its existing capabilities in the oil and gas sector, to deliver significant emissions abatement while generating export opportunities and wider economic benefits from CCUS.
    Keywords: Technological change, Productivity, carbon capture, environment, clean growth
    Date: 2021–09–22
  6. By: Julien Granata; Katherine Gundolf; Pierre Marques (IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée)
    Abstract: The paradox that unifies cooperation and competition may be at the root of several tensions (Gnyawali and Park, 2009). The multiplication of partners enhances both coopetition complexity and the tensions related to that multiplication. Consequently, the management of tensions is essential for coopetition to evolve over time. Our exploratory study investigates a case of horizontal multiple-firm coopetition to understand the evolution of tensions and their management. In this article, we identify the paradoxical tensions of coopetition as they develop over time and the related risks. The coopetitors multiply their coopetition strategies to overcome tensions. Additionally, we note that the management of paradoxical tensions contributes to the evolution of coopetitive relationships and allows partners to benefit from coopetition opportunities. Last, the case reveals the existence of a coopetitive portfolio for coopetitive managers.
    Abstract: Le paradoxe qui unit la coopération et la compétition peut être à l'origine de plusieurs tensions (Gnyawali et Park, 2009). La multiplication des partenaires accroît à la fois la complexité de la coopétition et les tensions liées à cette multiplication. Par conséquent, la gestion des tensions est essentielle pour que la coopétition évolue dans le temps. Notre étude exploratoire examine un cas de coopétition horizontale multi-entreprises pour comprendre l'évolution des tensions et leur gestion. Dans cet article, nous identifions les tensions paradoxales de la coopétition au fil du temps et les risques associés. Les coopétiteurs multiplient leurs stratégies de coopétition pour surmonter les tensions. De plus, on note que la gestion des tensions paradoxales contribue à l'évolution des relations coopétitives et permet aux partenaires de bénéficier d'opportunités de coopétition. Enfin, le cas révèle l'existence d'un portefeuille coopétitif pour les managers en charge de la coopétition.
    Keywords: coopetition management,paradoxical tensions,horizontal multiple firms,coopetitive portfolio,wine,wine coopetition management
    Date: 2021
  7. By: Rodier, Caroline; Harold, Brian; Zhang, Yunwan
    Abstract: In rural areas, cost-effective transit service is challenging due to greater travel distances, lower population densities, and longer travel times than in cities. As a result, the people who rely on public transit contend with infrequent and slow service, and keeping a sufficient number of personal vehicles in reliable working order can be prohibitively expensive for low-income families. UC Davis partnered with the eight San Joaquin Valley Metropolitan Planning Organizations to identify and support development of three innovative mobility pilot concepts for the region. The first pilot is an electric vehicle (EV) carsharing service known as Míocar, located in affordable housing complexes in eight rural communities in Tulare and Kern counties. The second is a volunteer ridesharing service, known as VOGO, which supplements existing transit services in transport-disadvantaged rural areas in San Joaquin and Stanislaus counties. The third is a Mobility-as-a-Service (MaaS) platform that allows planning and payment for fixed and demand-responsive transit services, including VOGO, in San Joaquin and Stanislaus counties. These pilots seek to (a) provide improved access to destinations for individuals with limited transportation alternatives, (b) and achieve greenhouse gas reductions through mode shifts from traditional internal combustion vehicles to EVs, ridesharing, and fixed transit. This report presents the methods and results for “before” and “after” evaluations conducted by UC Davis researchers to assess the performance and impacts of each pilot. The evaluations incorporate service usage data including telematics and MaaS application data, and survey data collected from pilot participants, to assess the programs beginning with pilot launch (2019 and2020) until November 2021. The results provide insights into participant characteristics and barriers to transportation, travel behavior, trip planning activities, and the extent to which the pilots addressed the travel needs of their target populations region. View the NCST Project Webpage
    Keywords: Business, Social and Behavioral Sciences, Electric vehicles, vehicle sharing, volunteer ridesharing, Mobilityas-a-Service (MaaS), social equity, rural transportation, pilot studies, low income groups, evaluation, counterfactual analysis, mode shift, increased mobility, transit access
    Date: 2022–05–01

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