How do Small Players Deduce Beliefs about Uncertainty? A Look at Texas Shale Oil Investments

Thesis (Ph.D.)--University of Washington, 2016-08

Discount rates for seed capital investments

Hasta el momento la estimación de las tasas de descuento requeridos por los empresarios ha seguido siendo un misterio. Mongrut y Ramírez (2006) hicieron una contribución a esta zona por deducción del límite inferior tasa de descuento para un empresario no diversificada en un mercado emergente. Sin embargo, utilizaron una función de utilidad cuadrática, que no tiene supuestos deseables. Esta investigación extiende el trabajo previo mediante la derivación de las expresiones de las tasas de descuento utilizando un Hiperbólico Absoluto Aversión al Riesgo (HARA) función de utilidad que incluye la cuadrática y la formas logarítmicas como casos especiales. Por otra parte, también se asume el empresario con el bajo la aversión al riesgo que invierte casi todo su capital en su proyecto o empresa y cuyo nivel de la riqueza se acerca a cero. Uno encuentra que ambas expresiones dependen de riesgo del empresario, la aversión y una medida del riesgo total del proyecto. El mantenimiento constante de la tasa libre de riesgo, simular las expresiones de la tasa de descuento para la forma cuadrática y la forma logarítmica. Como era de esperar, los rendimientos requeridos del empresario (descuentos) son muy sensibles tanto especificaciones y todos los valores fueron inferiores a 50% y la mayoría de ellos fueron inferiores a 25%, pero más alta que la tasa libre de riesgo asumido.

National evaluation of NHS genetics service investments: emerging issues from the cancer genetics pilots

In seeking to fulfil the ambition of the 2003 genetics white paper, Our Inheritance, Our Future, to ‘mainstream’ genetic knowledge and practices, the Department of Health provided start-up funding for pilot services in various clinical areas, including seven cancer genetics projects. To help to understand the challenges encountered by such an attempt at reconfiguring the organization and delivery of services in this field, a programme-level evaluation of the genetics projects was commissioned to consider the organizational issues faced. Using a qualitative approach, this research has involved comparative case-study work in 11 of the pilot sites, including four of the seven cancer genetics pilots. In this paper, the researchers present early findings from their work, focusing in particular on the cancer genetics pilots. They consider some of the factors that have influenced how the pilots have sought to address pre-existing sector, organizational and professional boundaries to these new ways of working. The article examines the relationship between these factors and the extent to which pilots have succeeded in setting up boundary-spanning services, dealing with human-resource issues and creating sustainable, ‘mainstreamed’ provision which attracts ongoing funding in a volatile NHS commissioning environment where funding priorities do not always favour preventive, risk-assessment services.

Essays on Financial Constraints, R&D Investments, and Competition

This dissertation consists of two chapters of theoretical studies that investigate the effect of financial constraints and market competition on research and development (R&D) investments. In the first chapter, I explore the impact of financial constraints on two different types of R&D investments. In the second chapter, I examine the impact of market competition on the relationship between financial constraints and R&D investments. In the first chapter, I develop a dynamic monopoly model to study a firm’s R&D strategy. Contrary to intuition, I show that a financially constrained firm may invest more aggressively in R&D projects than an unconstrained firm. Financial constraints introduce a risk that a firm may run out of money before its project bears fruit, which leads to involuntary termination on an otherwise positive-NPV project. For a company that relies on cash flow from assets in place to keep its R&D project alive, early success can be relatively important. I find that when the discovery process can be expedited by heavier investment (“accelerable” projects), a financially constrained company may find it optimal to “over”-invest in order to raise the probability of project survival. The over-investment will not happen if the project is only “scalable” (investment scales up payoffs). The model generates several testable implications regarding over-investment and project values. In the second chapter, I study the effects of competition on R&D investments in a duopoly framework. Using a homogeneous duopoly model where two unconstrained firms compete head to head in an R&D race, I find that competition has no effect on R&D investment if the project is not accelerable, and the competing firms are not constrained. In a heterogeneous duopoly model where a financially constrained firm competes against an unconstrained firm, I discover interesting strategic interactions that lead to preemption by the constrained firm in equilibrium. The unconstrained competitor responds to its constrained rival’s investment in an inverted-U shape fashion. When the constrained competitor has high cash flow risk, it accelerates the innovation in equilibrium, while the unconstrained firm invests less aggressively and waits for its rival to quit the race due to shortage of funds.

Credit application systems for investments in agriculture and livestock in rural areas in Latin America

La falta de recursos para mejorar los insumos y herramientas es causa fundamental de la falta de seguridad alimentaria, según las familias y organizaciones entrevistadas en las Comunidades Marginadas y Aisladas (CMA) en América Latina. Las familias que viven en este tipo de comunidades acceden a los insumos adecuados bien a través de la donación, o a través del crédito. La condición de marginación y aislamiento invita a optar por el crédito, al volverse imprescindible el contar con intervenciones sostenibles por la poca atención que este tipo de comunidades recibe de las autoridades públicas y la cooperación al desarrollo. De entre las metodologías para acceder a los créditos en las CMA destacan las líneas de crédito, los Programas de Grupos Solidarios (PGSs), o las Estructuras Financieras Locales (EFLs) o bancos comunales. Tras el análisis realizado en este artículo, se concluye que las EFLs o bancos comunales son la metodología capaz de arrojar mejores resultados.

Impact of IS/IT Investments on Firm Performance: Does Stakeholder Orientation Matter?

This research project addresses a central question in the IS business value field: Does IS/IT investments impact positively on firm financial performance? IS/IT investments are seen as having an enormous potential impact on the competitive position of the firm, on its performance, and demand an active and motivated participation of several stakeholder groups. Actual research conducted in the Information Systems field, relating IS/IT investments with firm performance use transactions costs economics and resource-based view of the firm to try to explain and understand that relationship. However, it lacks to stress the importance of stakeholder management, as a moderator variable in that relationship. Stakeholder theory sees the firm as the hub centric to the spokes representing various stakeholders who were in essence equidistant to the firm, and survival and continuing profitability of the corporation depend upon its ability to fulfil its economic and social purpose, which is to create and distribute wealth or value sufficient to ensure that each primary stakeholder group continues as part of the corporation’s stakeholder system. Stakeholder theory in its instrumental version, argues that if a firm pays attention to the stakes of all stakeholder groups (and not just shareholders), it will obtain higher levels of financial performance. With this premise in mind, the aim of this paper is to discuss and test the use of stakeholder theory in the IS business value stream of research, in order to achieve a better understanding of the impact of IS/IT investments on firm performance (moderated by stakeholder management). To achieve the expected impact from an IS/IT investment, it is argued that firms need a strong commitment from those stakeholder groups, which lead us to the need of a corporate “stakeholder orientation”. When firm financial performance is measured by returns on assets (ROA), returns on investments (ROI) and returns on sales (ROS), the results show that “stakeholder orientation” impact positively in the relation between IS/IT and firm performance, using a sample of Portuguese large companies.

Impact of Information Technology Investments on Firm Productivity in Peripherals Countries: The Case of Portugal

IS/IT investments are seen has having an enormous potential impact on the competitive position of the firm, on its performance, and demand an active and motivated participation of several stakeholder groups. The shortfall of evidence concerning the productivity of IT became known as the ‘productivity paradox’. As Robert Solow, the Nobel laureate economist stated “we see computers everywhere except in the productivity statistics”. An important stream of research conducted all over the world has tried to understand these phenomena, called in the literature as «IS business value» field. However, there is a gap in the literature, addressing the Portuguese situation. No empirical work has been done to date in order to understand the impact of Information Technology adoption on the productivity of those firms. Using data from two surveys conducted by the Portuguese National Institute of Statistics (INE), Inquiry to the use of IT by Portuguese companies (IUTIC) and the Inquiry Harmonized to (Portuguese) companies (accounting data), this study relates (using regression analysis) the amounts spent on IT with the financial performance indicator Returns on Equity, as a proxy of firm productivity, of Portuguese companies with more than 250 employees. The aim of this paper is to shed light on the Portuguese situation concerning the impact of IS/IT on the productivity of Portuguese top companies. Empirically, we test the impact of IT expenditure on firm productivity of a sample of Portuguese large companies. Our results, based on firm-level data on Information Technology expenditure and firm productivity as measured by return on equity (1186 observations) for the years of 2003 and 2004, exhibit a negative impact of IT expenditure on firm productivity, in line with “productivity paradox” claimants.

Knowledge management for ERP success

The business value of Enterprise Resource Planning (ERP) systems and in general large software implementations has been extensively debated in both popular press and academic literature for over three decades. Despite the positive motives for adoption, various organizations have reported negative impacts from these large investments. This ‘disconnect’ between large IS investments and firms’ organizational performance may be attributable to the economic transition from an era of competitive advantage based on information to one that is based on Knowledge. This paper discusses the initial findings of a two-phased study that focuses on empirically assessing the impact of knowledge management on the success of Enterprise Resource Planning systems. The research study uses information gathered from twenty-seven public sector organizations in Queensland, Australia. Validation of the a priori model constructs through factor analysis identified two dimensions of knowledge management. Further analysis assessed the comparative differences in perceptions of knowledge management in ERP, across four employment cohorts.

A balanced scorecard approach to enterprise systems performance measurement

A range of influences, both technical and organisational, has encouraged the wide spread adoption of Enterprise Systems (ES). Nevertheless, there is a growing consensus that Enterprise Systems have in many cases failed to provide expected benefits. The increasing role of, and dependency on ES (and IT in general), and the ‘uncertainty’ of these large investments, have created a strong need to monitor and measure ES performance. This paper reports on a research project aimed at deriving an ‘Enterprise Systems benefits measurement instrument’. The research seeks to identify how Enterprise Systems benefits can be usefully measured, with a ‘balance’ between qualitative and quantitative factors.

Using the Internet to leverage sponsorships

This study considers the effectiveness of the Internet as a medium through which sponsorship investments can be leveraged. It considers the variables of sponsor-sponsee congruence,articulation, and the extent to which a sponsorship is leveraged via sponsor websites, in relation to consumer attitudes toward brand and company level variables across time. Results show that,consumer attitudes are more favourable for congruent sponsorships, those that are not articulated in commercially-oriented terms, and those that are leveraged via sponsor websites. Additionally, after a seven-day delay, leveraged sponsorships display sustained positive attitudes whereas those not leveraged display a decline in attitudes.

Public-private partnerships in ICT for education

A recent World Bank report notes that across the world, per capita economic growth is driven by three information and communication technology (ICT)-related factors: investments in equipment and infrastructure, investments in human capital (i.e. in education and innovation), and efficient use of labour (human resource) and capital that increases productivity (Schware 2005). These three factors have a direct impact on the provisioning of education. For one, the demand to adopt ICT-supported education services, or e-education, is outweighing the capacity of governments to adequately support education reform and expansion.

Value-oriented process modeling : integrating financial perspectives into business process re-design

Purpose – Financial information about costs and return on investments are of key importance to strategic decision-making but also in the context of process improvement or business engineering. In this paper we propose a value-oriented approach to business process modeling based on key concepts and metrics from operations and financial management, to aid decision making in process re-design projects on the basis of process models. Design/methodology/approach – We suggest a theoretically founded extension to current process modeling approaches, and delineate a framework as well as methodical support to incorporate financial information into process re-design. We use two case studies to evaluate the suggested approach. Findings – Based on two case studies, we show that the value-oriented process modeling approach facilitates and improves managerial decision-making in the context of process re-design. Research limitations / implications – We present design work and two case studies. More research is needed to more thoroughly evaluate the presented approach in a variety of real-life process modeling settings. Practical implications – We show how our approach enables decision makers to make investment decisions in process re-design projects, and also how other decisions, for instance in the context of enterprise architecture design, can be facilitated. Originality/value – This study reports on an attempt to integrate financial considerations into the act of process modeling, in order to provide more comprehensive decision making support in process re-design projects.

The importance of gestation process dynamics

Principal Topic In this paper we seek to highlight the important intermediate role that the gestation process plays in entrepreneurship by examining its key antecedents and its consequences for new venture emergence. In doing so we take a behavioural perspective and argue that it is not only what a nascent venture is, but what it does (Katz & Gartner, 1988; Shane & Delmar, 2004; Reynolds, 2007) and when it does it during start-up (Reynolds & Miller, 1992; Lichtenstein, Carter, Dooley & Gartner, 2007) that is important. To extend an analogy from biological development, what we suggest is that the way a new venture is nurtured is just as fundamental as its nature. Much prior research has focused on the nature of new ventures and attempted to attribute variations in outcomes directly to the impact resource endowments and investments have. While there is little doubt that venture resource attributes such as human capital, and specifically prior entrepreneurial experience (Alsos & Kolvereid, 1998), access to social (Davidsson & Honig, 2003) and financial capital have an influence. Resource attributes themselves are distal from successful start-up endeavours and remain inanimate if not for the actions of the nascent venture. The key contribution we make is to shift focus from whether or not actions are taken, but when these actions happen and how that is situated in the overall gestation process. Thus, we suggest that it is gestation process dynamics, or when gestation actions occur, that is more proximal to venture outcomes and we focus on this. Recently scholars have highlighted the complexity that exists in the start-up or gestation process, be it temporal or contextual (Liao, Welsch & Tan, 2005; Lichtenstein et al. 2007). There is great variation in how long a start-up process might take (Reynolds & Miller, 1992), some processes require less action than others (Carter, Gartner & Reynolds, 1996), and the overall intensity of the start-up effort is also deemed important (Reynolds, 2007). And, despite some evidence that particular activities are more influential than others (Delmar & Shane, 2003), the order in which events may happen is, until now, largely indeterminate as regard its influence on success (Liao & Welsch, 2008). We suggest that it is this complexity of the intervening gestation process that attenuates the effect of resource endowment and has resulted in mixed findings in previous research. Thus, in order to reduce complexity we shall take a holistic view of the gestation process and argue that it is its’ dynamic properties that determine nascent venture attempt outcomes. Importantly, we acknowledge that particular gestation processes of themselves would not guarantee successful start-up, but it is more correctly the fit between the process dynamics and the ventures attributes (Davidsson, 2005) that is influential. So we aim to examine process dynamics by comparing sub-groups of venture types by resource attributes. Thus, as an initial step toward unpacking the complexity of the gestation process, this paper aims to establish the importance of its role as an intermediary between attributes of the nascent venture and the emergence of that venture. Here, we make a contribution by empirically examining gestation process dynamics and their fit with venture attributes. We do this by firstly, examining that nature of the influence that venture attributes such as human and social capital have on the dynamics of the gestation process, and secondly by investigating the effect that gestation process dynamics have on venture creation outcomes. Methodology and Propositions In order to explore the importance that gestation processes dynamics have in nascent entrepreneurship we conduct an empirical study of ventures start-ups. Data is drawn from a screened random sample of 625 Australian nascent business ventures prior to them achieving consistent outcomes in the market. This data was collected during 2007/8 and 2008/9 as part of the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) project (Davidsson et al., 2008). CAUSEE is a longitudinal panel study conducted over four years, sourcing information from annually administered telephone surveys. Importantly for our study, this methodology allows for the capture and tracking of active nascent venture creation as it happens, thus reducing hindsight and selection biases. In addition, improved tests of causality may be made given that outcome measures are temporally removed from preceding events. The data analysed in this paper represents the first two of these four years, and for the first time has access to follow-up outcome measures for these venture attempts: where 260 were successful, 126 were abandoned, and 191 are still in progress. With regards to venture attributes as gestation process antecedents, we examine specific human capital measured as successful prior experience in entrepreneurship, and direct social capital of the venture as ‘team start-ups’. In assessing gestation process dynamics we follow Lichtenstein et al. (2007) to suggest that the rate, concentration and timing of gestation activities may be used to summarise the complexity dynamics of that process. In addition, we extend this set of measures to include the interaction of discovery and exploitation by way of changes made to the venture idea. Those ventures with successful prior experience or those who conduct symbiotic parallel start-up attempts may be able to, or be forced to, leave their gestation action until later and still derive a successful outcome. In addition access to direct social capital may provide the support upon which the venture may draw in order to persevere in the face of adversity, turning a seemingly futile start-up attempt into a success. On the other hand prior experience may engender the foresight to terminate a venture attempt early should it be seen to be going nowhere. The temporal nature of these conjectures highlight the importance that process dynamics play and will be examined in this research Statistical models are developed to examine gestation process dynamics. We use multivariate general linear modelling to analyse how human and social capital factors influence gestation process dynamics. In turn, we use event history models and stratified Cox regression to assess the influence that gestation process dynamics have on venture outcomes. Results and Implications What entrepreneurs do is of interest to both scholars and practitioners’ alike. Thus the results of this research are important since they focus on nascent behaviour and its outcomes. While venture attributes themselves may be influential this is of little actionable assistance to practitioners. For example it is unhelpful to say to the prospective first time entrepreneur “you’ll be more successful if you have lots of prior experience in firm start-ups”. This research attempts to close this relevance gap by addressing what gestation behaviours might be appropriate, when actions best be focused, and most importantly in what circumstances. Further, we make a contribution to the entrepreneurship literature, examining the role that gestation process dynamics play in outcomes, by specifically attributing these to the nature of the venture itself. This extension is to the best of our knowledge new to the research field.

Beyond Bryan: Builders' liability and pure economic loss

In Bryan v Maloney, the High Court extended a builder’s duty of care to encompass a liability in negligence for the pure economic loss sustained by a subsequent purchaser of a residential dwelling as a result of latent defects in the building’s construction. Recently, in Woolcock Street Investments Pty Ltd v CDG Pty Ltd, the Court refused to extend this liability to defects in commercial premises. The decision therefore provides an opportunity to re-examine the rationale and policy behind current jurisprudence governing builders’ liability for pure economic loss. In doing so, this article considers the principles relevant to the determination of a duty of care generally and whether the differences between purchasers of residential and commercial properties are as great as the case law suggests

A framework for assessing social policy inclusion proposals

This document outlines a framework that could be used by government agencies in assessing policy interventions aimed at achieving social outcomes from government construction contracts. The framework represents a rational interpretation of the information gathered during the multi-outcomes construction policies project. The multi-outcomes project focused on the costs and benefits of using public construction contracts to promote the achievement of training and employment and public art objectives. The origin of the policy framework in a cost-benefit appraisal of current policy interventions is evidenced by its emphasis on sensitivity to policy commitment and project circumstances (especially project size and scope).The quantitative and qualitative analysis conducted in the multi-outcomes project highlighted, first, that in the absence of strong industry commitment to policy objectives, policy interventions typically result in high levels of avoidance activity, substantial administrative costs and very few benefits. Thus, for policy action on, for example, training or local employment to be successful compliance issues must be adequately addressed. Currently it appears that pre-qualification schemes (similar to the Priority Access Scheme) and schemes that rely on measuring, for example, the training investments of contractors within particular projects do not achieve high levels of compliance and involve significant administrative costs. Thus, an alternative is suggested in the policy framework developed here: a levy on each public construction project – set as a proportion of the total project costs. Although a full evaluation of this policy alternative was beyond the scope of the multi-outcomes construction policies project, it appears to offer the potential to minimize the transaction costs on contractors whilst enabling the creation of a training agency dedicated to improving the supply of skilled construction labour. A recommendation is thus made that this policy alternative be fully researched and evaluated. As noted above, the outcomes of the multi-outcomes research project also highlighted the need for sensitivity to project circumstances in the development and implementation of polices for public construction projects. Ideally a policy framework would have the flexibility to respond to circumstances where contractors share a commitment to the policy objectives and are able to identify measurable social outcomes from the particular government projects they are involved in. This would involve a project-by-project negotiation of goals and performance measures. It is likely to only be practical for large, longer term projects.