nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2023‒08‒21
six papers chosen by
Arvi Kuura
Tartu Ülikool

  1. The effect of staged projekt management on product innovation: Evidence from a firm survey By Haneda, Shoko; Kurihara, Koki; Ono, Arito
  2. Cross-cultural boundary spanning activities in a global team By Anne Bartel-Radic; Fabienne Munch
  3. Is the Emphasis on Cofinancing Good for Environmental Multilateral Funds? By Matthew Kotchen; Andrew Vogt
  4. Supply-chain disruptions and new investment policies in the post-COVID-19 world: Initial insights from project-level data By Monika Sztajerowska
  5. Unbalanced Investments: Accra’s Informal Settlements By Robert Stewart
  6. Tax Losses and Ex-Ante Offshore Transfer of Intellectual Property By Rishi Sharma; Joel Slemrod; Michael Stimmelmayr

  1. By: Haneda, Shoko; Kurihara, Koki; Ono, Arito
    Abstract: This study examines whether staged project management is beneficial or harmful for making product innovations. Using a unique firm urvey for Japan, we find that firms that employed staged project management had a higher likelihood of introducing new products to the market. Additional estimations show that the positive effect of staged project management on product innovation is stronger when firms provided feedback at the interim stages. In contrast, whether and how firms set milestones was not associated with the likelihood of product innovation. The marginal effect of feedback was larger for new-to-market product innovation than for new-to-firm product innovation, and the feedback from non-R&D organizations within the firm in the initial stages was particularly beneficial for the introduction of new-to-market products. Our findings suggest that staged project management is beneficial for product innovation, but its effectiveness depends on how firms set milestones and feedback as well as the nature of innovation.
    Keywords: staged project management, product innovation, milestones, feedback, exploration, exploitation
    JEL: D22 G32 M11 O31
    Date: 2023
  2. By: Anne Bartel-Radic (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes, IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - UGA - Université Grenoble Alpes); Fabienne Munch (OSU - Ohio State University [Columbus])
    Abstract: How can global team leaders effectively span boundaries between highly diverse and distant team members, manage cross-cultural conflict, and foster team performance? Global team leadership continues to face persistent challenges, and while the boundary spanning literature has identified relevant characteristics, traits, competencies, and skills of effective boundary spanners, it says little about boundary spanning activities. This paper proposes new contributions to this question through an ethnographic case study of a highly successful global R&D project team. Over the course of the 2-year project, three conflict situations were resolved through cross-cultural boundary spanning activities. From an ethnographic perspective, the dynamics at work are described in detail. To better understand these dynamics, the paper draws on loosely coupled systems theory by asking how structural and cultural coupling can facilitate boundary spanning activities. In doing so, the paper extends the theory of boundary spanning and global team leadership and connects boundary spanning with loosely coupled systems theory. The contributions relate to four main propositions: effective global team leaders span intra-team boundaries through coupling activities; task-related "structural coupling" and relationship-related "cultural coupling" are interdependent; effective boundary spanning combines tight structural and loose cultural coupling; and boundary spanning objects and agents enhance coupling activities.
    Keywords: Boundary Spanning, Case study, Cultural diversity, Global teams, Global team leadership, Intercultural collaboration, Loosely Coupled Systems
    Date: 2023–06–27
  3. By: Matthew Kotchen; Andrew Vogt
    Abstract: International environment and development agencies increasingly emphasize external cofinancing when selecting projects to fund. This paper considers whether the emphasis on cofinancing helps promote institutional objectives, or creates perverse and inefficient incentives. We present a model of project selection that can apply to any funding agency, but focus on environmental multilateral funds and climate change. We show that introducing cofinancing objectives to a fund that seeks to maximize its immediate environmental impact is redundant as best, and more likely counterproductive. We test implications of our model using project-level data from two of the leading environmental multilateral funds, the Global Environment Facility (GEF) and the Green Climate Fund (GCF). While tradeoffs exist between emission reductions and cofinancing, we find that they are not strong enough to imply that current cofinancing preferences are diminishing the environmental benefits that funds can claim. However, we also find that the emphasis on cofinancing in project selection is likely to be globally inefficient, as projects with greater cofinancing ratios tend to yield smaller emission reductions per gross dollar spent. This finding should sound a note of caution given the overall scarcity of financial resources available to achieve global climate goals.
    JEL: O13 Q01 Q58
    Date: 2023–07
  4. By: Monika Sztajerowska
    Abstract: The COVID 19 pandemic has inflicted a series of shocks on the global economy, not least impacting global trade and investment. During the same time, several countries adopted new foreign direct investment (FDI) related policies. This paper presents novel preliminary evidence on the effects of these new FDI policies and COVID-19-related supply-chain disruptions on cross-border investment. It employs, among others, granular data on FDI policies and investment projects undertaken in a wide range of sectors in 175 host economies worldwide by investors from 46 home countries. It finds that a combination of FDI policies and COVID-19-related measures has a statistically significant and economically meaningful negative effect on the probability of a new cross-border greenfield investment project occurring during the sample period. The effect is the strongest in sectors with high R&D intensity.
    Keywords: COVID-19, de-globalisation, FDI, Foreign direct investment, greenfield, supply chains
    JEL: F15 F21 F23 F52
    Date: 2023–07–31
  5. By: Robert Stewart (The University of Toronto)
    Abstract: Canada, like other G7 countries, has set an ambitious greenhouse gas emissions reduction target for 2030, and a goal of net zero emissions by 2050. However, while other G7 countries’ emissions levels have declined over the last decade, Canada’s emissions have risen. Despite government policies and public financing to counter this trend, there remains a financing gap for low-carbon investments that support the 2030 target. Public financing is insufficient and private financing can be constrained by barriers such as policy uncertainties, undesirable financial risks, and high capital demand for project investments. Green Investment Banks (GIBs) are designed to finance low-carbon economic development by mobilizing private financial capital towards low-carbon investments. This paper describes and analyses GIBs as institutional tools capable of addressing the low-carbon financing gap in Canada. I identify the main characteristics of GIBs (governance structure, capitalization method, asset vehicles, and performance measurement) and show how GIBs are being used to catalyse low-carbon investments and build institutional capacity to support low-carbon economic development. GIBs focus on long-term financing instruments and innovative financing mechanisms to reduce the barriers between private capital and low-carbon investments. GIBs help scale up private investments and reduce dependence on limited and inconsistently available public financing. GIBs can also support institutional capacitybuilding by aiding low-carbon policy development and supporting environmental awareness and low-carbon transition education. This paper looks at four well-established GIBs – Australia’s Clean Energy Finance Corporation (CEFC), the UK Green Investment Bank (UKGIB), the Connecticut Green Bank (CTGB), and the New York Green Bank (NYGB) – and describes some of their achievements. The paper then discusses the potential for municipal GIBs in Canada, and highlights The Atmospheric Fund (TAF) in Toronto and the Low-Carbon Cities Canada (LC3) Network, which will establish institutions similar to TAF in six other Canadian cities: Vancouver, Calgary, Edmonton, Ottawa, Montréal, and Halifax. While TAF operates like a GIB, there is more focus on grantmaking than is typically observed in other notable GIBs. TAF operates as both a grant-making and an investing institution. TAF’s grants, however, are funded from investment returns on its endowment capital, protecting its capital from being eroded. In general, grants reduce capital recycling potential and limit capital growth. While capital growth may not be an intended part of TAF’s mandate, a more standard GIB approach would reduce grants in favour of commercial financing that can attract private investment. GIBs have been increasing in the United States, but are absent in Canada. The emerging LC3 Network could implement the GIB model across Canadian cities to leverage the catalytic financing capabilities that GIBs bring to low-carbon investments. To support this outcome, the LC3 Network should focus on building coalitions with financial institutions to identify barriers between the sources and destinations of financial capital, and develop effective mechanisms to reduce these barriers and accelerate private financing for low-carbon investment projects in Canadian cities. Through the GIB model, cities can also further leverage institutional capacity-building for low-carbon economic development.
    Keywords: green investment banks, infrasture, The Atmospheric Fund, municipalities, low-carbon investments, TAF, municipal green investment banks
    Date: 2023–08
  6. By: Rishi Sharma; Joel Slemrod; Michael Stimmelmayr
    Abstract: We develop a positive model of multinational firm behavior and analyze a firm’s incentive to transfer an intellectual property (IP) right of uncertain value offshore ex ante, i.e. before its success or failure is realized. Our analysis highlights two major aspects of this decision. First, an asymmetric treatment of project gains and losses in the home country creates an incentive to transfer IP to a foreign lowtax country to avoid potentially negative profits at home. These incentives exist even when IP is priced at a fair arms-length price and are further strengthened in the presence of R&D tax incentives. Second, when multinationals have private information about the probability of project success, they have an incentive to transfer their most promising IP ex ante.
    JEL: H25
    Date: 2023–07

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