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on Project, Program and Portfolio Management |
| By: | Ajzenman, Nicolás; Balza, Lenin; Bejarano, Hernan; De Los Rios, Camilo; Gómez Parra, Nicolás |
| Abstract: | Using an online multi-country video-vignette survey experiment, we measure bias against extractive industries and foreign firms in individuals perceptions and preferences related to industrial projects with potential economic benefits and environmental costs. Individuals face a hypothetical industrial investment project with a randomly assigned implementing firm, which varies in one or two dimensions: nationality (foreign or national), and industrial sector (extractive or generic). We elicit several incentivized and non-incentivized measures of acceptance of hypothetical investments. We find a precisely estimated null effect on willingness to pay to block the projects across experimental treatments: respondents express similar reactions to the same information independently of the firms origin or industrial sector. |
| Keywords: | experimental economics;extractive industries;Perceptions;willingness– to–pay;valuation |
| JEL: | C90 D70 D90 L71 Q30 Q51 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:13325&r=ppm |
| By: | Martin Gregor (Institute of Economic Studies, Faculty of Social Sciences, Charles University); Beatrice Michaeli (UCLA Anderson School of Management) |
| Abstract: | We study how interest alignment between CEOs and corporate boards influences investment efficiency and identify a novel force behind the benefit of misaligned preferences. Our model entails a CEO who encounters a project, gathers investment-relevant information, and decides whether or not to present the project implementation for approval by a sequentially rational board of directors. The CEO may be able to strategically choose the properties of the collected information---this happens, for instance, if the project is ``novel" in the sense that it explores new technology, business concept, or market and directors are less knowledgeable about it. We find that only sufficiently conservative and expansion-cautious directors can discipline the CEO's empire-building tendency and opportunistic information collection. Such directors, however, underinvest in projects that are not novel. From the shareholders' perspective, the board that maximizes firm value is either conservative or neutral (has interests aligned with those of the shareholders) and always overinvests in innovations. Boards with greater expertise are more likely to be conservative, but their bias is less severe. Our analysis shows that board's commitment power and bias are substitutes. |
| Keywords: | Empire-building, biased board, underinvestment, overinvestment, endogenous information |
| JEL: | D83 D86 G30 G31 G34 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_11&r=ppm |
| By: | Schwartz, Demitrius; Batabyal, Amitrajeet |
| Abstract: | The potential of rooftop solar power has been identified as a main driver of clean energy adoption in an urban environment. While residential solar projects have lower capacity than commercial systems, residential solar represents most of the installation base for rooftop solar projects. Rooftop solar adoption in the commercial market lags residential solar installation. To better understand why this is the case, we conduct a case study of a small, manufacturing firm. Based on the firm's energy demand and the physical attributes of its location, we study a 25-kilowatt solar array using the National Renewable Energy Laboratory’s (NREL) System Advisor Model (SAM). Our empirical study is used to evaluate the economic prospects of a rooftop solar installation project for the firm under study. This analysis sheds light on the financial ramifications of the adoption of solar panels by small, commercial firms in New York state. |
| Keywords: | Decision-Making, Incentive, Photovoltaic System, Solar Energy, Small Business |
| JEL: | D81 M21 Q42 |
| Date: | 2023–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120361&r=ppm |
| By: | Samuel Pienknagura |
| Abstract: | This paper assesses the role of climate policies as a catalyst of low carbon technologies deployment through foreign direct investment (FDI). Leveraging detailed cross-border project-level information, it identifies “green” FDI and finds that a higher number of active climate policies is associated with higher levels of green FDI inflows. Importantly, climate policies do not appear to be linked to lower levels of non-green projects, suggesting relatively small overall costs from the green transition. The paper also finds heterogeneity across sectors and policy instruments. The association between climate policies and green projects is particularly strong in energy and manufacturing, and when the composition of the recipient's climate portfolio is tilted towards binding policies (e.g., taxes and regulation) and expenditure measures. Finally, results point to policy spillovers, whereby larger climate policy portfolios in the source country are linked to higher green FDI outflows, but green subsidies can discourage them. This, in turn, implies that subsidies could hamper efforts to deploy low-carbon technologies across countries. |
| Keywords: | Climate policies; FDI; low carbon technologies; renewable energy |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/046&r=ppm |
| By: | Martin Gregor (Institute of Economic Studies, Faculty of Social Sciences, Charles University); Beatrice Michaeli (UCLA Anderson School of Management) |
| Abstract: | In their role as initiators of new business projects, CEOs have an advantage over access to and control over project-related information. This exacerbates pre-existing agency frictions and may lead to investment inefficiencies. To counteract this challenge, incentive compensation for corporate boards (responsible for approving major projects) emerges as a critical governance tool. Our study demonstrates that the optimal compensation design requires strategically allocating a liability burden between CEOs and boards. When this burden is shifted onto the boards, shareholders reduce management rents, albeit at the expense of residual inefficiency. Our findings thus highlight that shareholders' tolerance for investment inefficiencies may be rooted in optimal compensation. We predict that contracts tolerating excessive investments are optimal under conditions of low labor market value for CEOs, severe CEO empire-building, and attractive outside options for directors. Because of structural changes associated with the reallocation of financial incentives, the non-financial characteristics of CEOs and boards may impact investment efficiency, information quality, project profits, and management rents in a non-monotonic manner. |
| Keywords: | Board monitoring, director compensation, investment inefficiency |
| JEL: | D83 D86 G30 G31 G34 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_12&r=ppm |
| By: | Büchele, Stefan; Bünstorf, Guido; Cantner, Uwe; Dreier, Lukas; Meurer, Petra; Neumann, Liam Paul |
| Keywords: | Technology policy, Impact assessment, Germany |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:efisdi:285357&r=ppm |
| By: | Savvakis C. Savvides (Visiting Lecturer, John Deutsch International Executive Programs, Queens University, Canada.) |
| Abstract: | Through this paper the author highlights the importance of constructing an integrated financial model and in using growth patterns in projecting the key parameter projections to generate consistent and meaningful scenarios during a Monte Carlo simulation risk analysis application and to avoid and contain the correlation problem. The Integrated Financial Model© by Savvakis C. Savvides was created and tested after many years of expertise of the author in corporate lending and project finance as well as from teaching investment appraisal and risk analysis and the development of several related software. It is argued that to apply Monte Carlo Simulation Risk Analysis in a meaningful manner and to enhance the decision-making process the methodology should not be used “as a toy†but rather in a thoughtful manner that takes into consideration all aspects of a prudently constructed business plan and as this is manifested through an integrated financial model. The use of growth pattern functions for the key risk variables is essential so as to contain the correlation problem and for the simulation to be based on consistent and realistic scenarios. |
| Keywords: | Market analysis, quantity demanded, elasticity of demand, project evaluation, market segmentation, market penetration. |
| JEL: | D11 D61 H43 L21 M31 |
| Date: | 2024–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:4615&r=ppm |
| By: | Pender, John; Goldstein, Joshua; Mahoney-Nair, Devika; Charankevich, Hanna |
| Abstract: | This study investigates the areas and populations served by three USDA rural broadband programs—the Broadband Initiatives Program (BIP), the Community Connect grant program, and the ReConnect program. BIP was the largest of these programs (through fiscal year 2021) in terms of net obligations and population in areas served (more than 1.3 percent of the U.S. population). However, BIP projects had the smallest value of obligations per person ($875 in 2020 dollars) and per square mile of approved project service areas ($26, 000 in 2020 dollars). The populations served by all three programs tended to be more rural, less educated, poorer, and older than those in areas not served (for BIP) or ineligible (for Community Connect and ReConnect). All programs reached a larger share of the American Indian/Alaska Native (AIAN) and White populations than other races and a larger share of the non-Hispanic than Hispanic population. A larger share of the AIAN population was served by Community Connect and ReConnect because a larger share of the AIAN population was eligible. However, a smaller share of the eligible AIAN population lived in approved ReConnect project service areas than most other racial groups because a smaller share of eligible AIANs lived in areas that applied to ReConnect. |
| Keywords: | Agricultural and Food Policy, Community/Rural/Urban Development, Public Economics |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uersib:340565&r=ppm |