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on Project, Program and Portfolio Management |
| By: | Bogner, Kristina |
| Abstract: | Analyzing the effect of Direct Project Funding (DPF) on innovative performance of economic agents is a major challenge for innovation economists and policy makers who must give valid policy recommendations and decide on the allocation of financial resources. An approach that becomes more and more important is the use of agent-based modeling in analyzing innovative performance of market players. In this paper, an agentbased percolation model is used to investigate the effects of project funding on innovative performance in terms of the maximum technological frontier that can be reached as well as in terms of the number of innovations generated by firms. The model results show that firms which participate in subsidized projects outperform firms that do not participate in subsidized projects, especially in increasingly complex technological fields. However, the worse performance of firms that do not participate in subsidized projects can be offset by an increase in the firms' financial resources. Hence, the model indicates, the effect of project funding is a purely financial one and might even have negative effects on innovative performance. This is the case if, for instance, a high number of funded research projects disturbs firms' paths through the technology space. Following the results of the model, project funding is most effective and important in increasingly complex technology spaces and less effective and important in less complex technology spaces. Moreover, the model results show, other financial resources as venture capital can substitute for direct project funding. |
| Keywords: | project funding,innovation,technology space,agent-based simulation |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:102015&r=ppm |
| By: | Roland, Strausz |
| Abstract: | Crowdfunding provides the innovation that, before the investment, entrepreneurs contract with consumers. Under demand uncertainty, this improves a screening for valuable projects. Entrepreneurial moral hazard threatens this benefit. Focusing on the trade-off between value screening and moral hazard, the paper characterizes optimal mechanisms. Current crowdfunding schemes reflect their salient features. Efficiency is sustainable only if returns exceed investment costs by a margin reflecting the degree of moral hazard. Constrained efficient mechanisms exhibit underinvestment. Crowdfunding blurs the distinction between finance and marketing, but complements rather than substitutes traditional entrepreneurial financing. As a screening tool for valuable projects, crowdfunding unambiguously promotes social welfare. |
| Keywords: | Crowdfunding; finance; marketing; demand; uncertainty; moral hazard |
| Date: | 2015–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:527&r=ppm |
| By: | Demeulemeester, Sarah; Hottenrott, Hanna |
| Abstract: | Financing research and development (R&D) through loans is usually a costly endeavor. Information asymmetry, outcome uncertainty and low collateral value tend to increase the cost of debt. Based on a large panel of heterogeneous firms, this study shows that recipients of public R&D grants, on average, face lower costs of debt. The findings also suggest that a process of certification in which the subsidy signals the quality of the firm's R&D to external lenders rather than a 'resource effect', i.e. the direct liquidity impact of the subsidy, explains this observation. The comparison between young and established firms shows that the certification effect for young firms primarily stems from subsidies for basic research, that is, for the stage of R&D in which outcome uncertainty and information asymmetries are typically larger. In addition, young firms seem to benefit from a 'formation effect' through learning from the subsidy application process. Application experience may improve young firms' R&D project plans in a way that reduces information asymmetries between firms and lenders. |
| Keywords: | Innovation policy,Research & Development,R&D subsidies,cost of debt,financial constraints |
| JEL: | O31 O38 G30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:201&r=ppm |
| By: | Tanja Sinozic; Mete Basar Baypinar; Edward M. Bergman; Miklos Hornyak; Ferenc Kruzslicz; Attila Varga |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwsre:sre-disc-2015_04&r=ppm |
| By: | Bonfiglioli, Alessandra; Crinò, Rosario; Gancia, Gino A |
| Abstract: | We study the equilibrium determinants of firm-level heterogeneity in a model in which firms can affect the variance of their productivity draws at the entry stage and explore the implications in closed and open economy. By allowing firms to choose the size of their investment in innovation projects of unknown quality, the model yields a Pareto distribution for productivity with a shape parameter that depends on industry-level characteristics. A novel result is that export opportunities, by increasing the payoffs in the tail, induce firms to invest in bigger projects with more spread-out outcomes. Moreover, when more productive firms also pay higher wages, trade amplifies wage dispersion by making all firms more unequal. These results are consistent with new evidence on how firm-level heterogeneity and wage dispersion vary in a panel of U.S. industries. Finally, we use patent data across U.S. states and over time to provide evidence in support of a specific mechanism of the model, namely, that export opportunities increase firm heterogeneity by fostering innovation. |
| Keywords: | firm heterogeneity; international trade; productivity dispersion; wage inequality |
| JEL: | E24 F12 F16 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10938&r=ppm |
| By: | Sabri, Yasmine (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm, Sweden, & Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy); Nuur, Cali (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm); Micheli, Guido J.L. (Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy) |
| Abstract: | Physical supply chains are the medium where innovation practices are usually implemented, whether in the case of introducing new products/processes, or when improving existing designs of products/processes, radically or incrementally. Thus, process and product innovation practices have become an integral part of decisions relating to the management and design of supply chains. This study investigates how innovation implementation is a cornerstone in the decision making process of supply chain configuration. Furthermore, it examines how this relation is manifested with respect to performance. The paper explores the configuration profiles of two major manufacturers based in Italy and Sweden, with globally designed upstream and downstream chains, demonstrating the differences and similarities, while investigating the innovation practices within each firm. The paper draws conclusions on the relation between innovation implementation and supply chain management, in addition to configuration and re-configuration decision making process. |
| Keywords: | Supply Chain Configuration; Innovation practices; Performance |
| JEL: | L25 O32 |
| Date: | 2015–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthind:2015_012&r=ppm |