Proceedings of an international workshop on the value of computer-based engineering tools, held in Cambridge in April 1997

There is increasing adoption of computer-based tools to support the product development process. Tolls include computer-aided design, computer-aided manufacture, systems engineering and product data management systems. The fact that companies choose to invest in tools might be regarded as evidence that tools, in aggregate, are perceived to possess business value through their application to engineering activities. Yet the ways in which value accrues from tool technology are poorly understood.

This report records the proceedings of an international workshop during which some novel approaches to improving our understanding of this problem of tool valuation were presented and debated. The value of methods and processes were also discussed. The workshop brought together British, Dutch, German and Italian researchers. The presenters included speakers from industry and academia (the University of Cambridge, the University of Magdeburg and the Politechnico de Torino)

The work presented showed great variety. Research methods include case studies, questionnaires, statistical analysis, semi-structured interviews, deduction, inductive reasoning, the recording of anecdotes and analogies. The presentations drew on financial investment theory, the industrial experience of workshop participants, discussions with students developing tools, modern economic theories and speculation on the effects of company capabilities.

External corporate venture capital investment: Towards a framework for capturing and measuring strategic value

This paper presents the initial results of on-going research in the field of external Corporate Venture Capital (CVC) investments, i.e. equity investments of large corporations in entrepreneurial ventures which originated outside the corporation. The research is motivated by the fact that external CVC plays an increasingly important role within the strategy of corporations. Driven by a general trend towards a more open approach to innovation, companies see particular value in external corporate venturing as a tool to gain, for example, access to complementary technologies and a general window on technology developments. The review of literature in the field of external corporate venturing clearly reveals that theoretical gaps exist in understanding mechanisms for capturing value and measurements of this value. To help close these gaps, the research addresses the underlying question "How do corporations and start-ups capture and measure strategic value through external CVC investments" by using embedded, multiple case studies. Following an initial set of case studies, steps towards the development of a framework for capturing and measuring strategic value from CVC investments are outlined within this paper and the resulting preliminary framework is presented. The paper closes with an outlook on ongoing and future research steps. © 2009 PICMET.

Shortening the decision distance: Selecting decision aids for improved technology investment performance

Deciding which technology to invest in is a recurring issue for technology managers, and the ability to successfully identify the right technology can be a make or break decision for a company. The effects of globalisation have made this issue even more imperative. Not only do companies have to be competitive by global standards but increasingly they have to source technological capabilities from overseas as well. Technology managers already have a variety of decision aids to draw upon, including valuation tools, for example DCF and real options; decision trees; and technology roadmapping. However little theory exists on when, where, why or even how to best apply particular decision aids. Rather than developing further techniques, this paper reviews the relevance and limitations of existing techniques. This is drawn from an on going research project which seeks to support technology managers in selecting and applying existing decision aids and potentially in the design of future decision aids. It is intended that through improving the selection of decision aids, decision performance can be increased, leading to more effective allocation of resources and hence competitive advantage. (c) 2006 PICMET.

Agglomeration effects in foreign direct investment and the pollution haven hypothesis

Does environmental regulation impair international competitiveness of pollution-intensive industries to the extent that they relocate to countries with less stringent regulation, turning those countries into "pollution havens"? We test this hypothesis using panel data on outward foreign direct investment (FDI) flows of various industries in the German manufacturing sector and account for several econometric issues that have been ignored in previous studies. Most importantly, we demonstrate that externalities associated with FDI agglomeration can bias estimates away from finding a pollution haven effect if omitted from the analysis. We include the stock of inward FDI as a proxy for agglomeration and employ a GMM estimator to control for endogenous time-varying determinants of FDI flows. Furthermore, we propose a difference estimator based on the least polluting industry to break the possible correlation between environmental regulatory stringency and unobservable attributes of FDI recipients in the cross-section. When accounting for these issues we find robust evidence of a pollution haven effect for the chemical industry. © 2008 Springer Science+Business Media B.V.

Encouraging clean energy investment in developing countries: what role for aid?

A large portion of foreign assistance for climate change mitigation in developing countries is directed to clean energy facilities. To support international mitigation goals, however, donors must make investments that have effects beyond individual facilities. They must reduce barriers to private-sector investment by generating information for developers, improving relevant infrastructure, or changing policies. We examine whether donor agencies target financing for commercial-scale wind and solar facilities to countries where private investment in clean energy is limited and whether donor investments lead to more private investments. On average, we find no positive evidence for these patterns of targeting and impact. Coupled with model results that show feed-in tariffs increase private investment, we argue that donor agencies should reallocate resources to improve policies that promote private investment in developing countries, rather than finance individual clean energy facilities.

Investment and Capitalization of Firms in the USA

In the USA today, the precipitous rise of new financial mechanisms for capitalisation of firms as well as the merger and acquisition of others, especially risk equity capital through venture capitalist and investment banking, has sparked growth and helped to bring the economy out of the 1990s recession into a robust continuous growth pattern well positioned for the next century. The scenario is not new. For the venture capitalists of ''Silicon Valley'' in California, the experience is not new. They have seen the new industries arise before, like a phoenix from ashes of ruin, despair and even failure. Venture capital poured into high tech start-up companies has been an enormous source of financial support for the entrepreneurs who head new and growing companies. The mid-1990s marked the most dramatic increase yet recorded. Indicators, such as the NASDAQ document, outlined the solid and continuous growth in high tech industries. The paper discusses investment in US corporations within the context of governance and management of the company. Discussion about the various forms of finance are related to the organisation and management of the US corporation. Critical to any firm today are its ability to find innovative, new products or services. A growing literature on resource-base framework for analysis will be discussed as part of the firm's development of research for commercialisation. The results of a recent survey further shed light on the relationship between corporate financial management and allocated resources for research and development as the ''engine'' for new product development and therefore corporate market share and growth. The conclusion is that more financial mechanisms will be created and changed within US corporate systems to adjust, grow, and expand companies in the global economic arena, as the inevitable economic pattern leads to mergers, consolidations, and increasing cooperation and alliances among firms.

Sense and sensibility: The role of business incubator client advisors in assisting high-technology entrepreneurs to make sense of investment readiness status

For high-technology entrepreneurs, attaining an appropriate level of investment to support new ventures is challenging as substantial investment is usually required prior to revenue generation. Consequently, entrepreneurs must present their firms as investment ready in the context of an uncertain market response and an absence of any trading history. Gaining tenancy within a business incubator can be advantageous to this process given that placement enhances entrepreneurial contact with potential investors whilst professional client advisors (CAs) use their expertise to assist in the development of a credible business plan. However, for the investment proposal to be successful, it must make sense to fund managers despite their lack of technological expertise and product knowledge. Thus, this article explores how incubator CAs and entrepreneurs act in concert to mould innovative ideas into plausible business plans that make sense to venture fund investors. To illustrate this process, we draw upon empirical evidence which suggests that CAs act as sense makers between venture fund managers (VFMs) and high-technology entrepreneurs, yet their role and influence appears undervalued. These findings have implications for entrepreneurial access to much needed funding and also for the identification of investment opportunities for VFMs. © 2011 Taylor & Francis.

The International Regulatory Regime on Capital Flows

Capital controls and exchange restrictions are used to restrict international capital flows during economic crises. This paper looks at the legal implications of these restrictions and explores the current international regulatory framework applicable to international capital movements and current payments. It shows how international capital flows suffer from the lack of a comprehensive and coherent regulatory framework that would harmonize the patchwork of
multilateral, regional, and bilateral treaties that currently regulate this issue. These treaties include the Articles of Agreement of the International Monetary Fund (IMF Articles), the General Agreement on Trade in Services (GATS), free-trade agreements, the European Union treaty, bilateral investment treaties, and the Organization for Economic Co-operation and Development (OECD) Code of Liberalization of Capital Movements (OECD Code of Capital Movement). Each
of these instruments regulate differently capital movements with little coordination with other areas of law. This situation sometimes leads to regulatory overlaps and conflict between different sources of law. Given the strong links between capital movements and trade in services, this paper pays particular attention to the rules of the GATS on capital flows and discusses the policy space available in the GATS for restricting capital flows in times of crisis.

Pro-internationalisation policies and outward foreign direct investment

This thesis addresses the impacts of public policies on outward foreign direct investment, seeking to contribute to a better understanding of the interplay between pro-internationalisation policies and firm behaviour. Home country measures associated with these policies are explored in terms of use and awareness, as determinants of foreign direct investment, as drivers of policy objectives, in terms of perceived importance and impact in different scenarios of internationalisation. Using a comprehensive database of 441 Portuguese firms, being those that had participated at least in one of the 11 types of public support between 1994 and 2009. The empirical papers presented here reveal a moderating effect of firm capabilities and internationalisation conditions on policy objectives. In fact, firms’ resources and capabilities frame the awareness and use of home country support measures, the existence of public policy determinants of foreign direct investment, the decision to carry out more aggressive modes of entry and the choice of more demanding environments, the impact of policy objectives, and the perceived importance of incentives. In practical terms, the findings of this thesis points that firms’ resources and capabilities are negatively associated with the use of public support, contrasting with awareness, which is found to increase with firms’ resources and capabilities. This insight sheds light on a potential problem of incentives allocation. Our results support the established theorizing about the co-evolution of government and firms' policies, home country measures being found as determinants of foreign direct investment. It is also shown that prointernationalization policies reinforce the firms’ resources and capabilities, which seems to have a positive impact on international growth. An evaluation of public policy, from the foreign direct investor's lens, supports the argument that firms involved in more demanding projects tend to attribute more importance to public supports. Behind the specific and concrete contributions identified in each of the empirical papers, as a whole this thesis makes methodological contributions by introducing the evaluation of impacts of public policies to the field of international business through the firm perspective; these contributions are achieved by taking the pro-internationalisation policies of a small open economy to better understand the impacts of public policies, and by shedding light on co-evolution between resource and institutional-based views.