Capital-intensive Investment Research Articles

The life cycle of New York’s creative districts: Reflections on the unanticipated consequences of unplanned cultural zones

The history of New York’s creative districts from Greenwich Village in the early 1900s to Bushwick today shows that the unanticipated consequences of unplanned or naturally occurring areas where artists work and live are higher housing prices, more intensive capital investment, and eventual displacement and gentrification. Despite predominant motifs of grittiness and transgression, the esthetic representation of “difference” in creative districts attracts non-creative cultural consumers who develop a taste for an authentic, bohemian lifestyle. Cultural entrepreneurs, some of whom are creative producers themselves, enable knowledgeable consumers’ entry into the creative district, followed eventually by the media, more consumers, and real estate developers. The little state regulation of artists’ housing that exists does not serve the stated goal, for the building of a district’s reputation as “creative” results in group out-migration to other places.

Do privatized airports add financial value?

The airport business is very capital intensive and substantial investment is needed to accommodate traffic growth. Since there is basically no research on the resulting dilemma of capital funding requirements and delivering shareholder value, the aim of this paper is to explore this issue in depth. In order to address the question if privatized airports earn their cost of capital, 2003–2009 data is used for a long-term trend analysis, comparing the financial performance of ten publicly quoted European airports. The majority of sample airports generate a negative economic value added for most of the seven years and correlational research reveals that traffic-induced investment spending is the single most influential factor. Airport management can improve the value-added margin between the return rate generated by the capital permanently employed and its weighted average cost via optimal phasing of investment activities, gearing of the balance sheet and financing of capital expenditure.

Faktor–Faktor Ekonomi dan Non Ekonomi Terhadap Perkembangan Pasar Modal Serta Implikasinya Pada Perekonomian Nasional.

The methodology used in this research was ex post facto with the secondary data collected from the Statistic Center Bureau, Bank Indonesia, Indonesia Stock market and Bapepam-LK. The statistical analysis used in this research to compute the data was a regression and correlation analysis with the hypothesis test significant level of α = 0.05. Results of research presented findings of the following: (i) The macro economics factors simultaneously affected the capital market development very significantly (R-square = 0.8266). (ii) The micro economics factors simultaneously affected the capital market development very significantly (R-square = 0.8015). (iii) The non economic factors simultaneously affected the capital market development very significantly (R-square = 0.7811). (vi) The effect of capital market development on gross domestic product was very significant (R-square = 0.7446). (v) Due to the general investors policy on the capital intensive investment, the effect of gross domestic product on unemployment rate was vefry significant (R-square = 0.9040). Based on the research findings, the followings were recommended: (i) Fiscal policy and monetary policy have to consider of capital market development,(ii) the enterprise have to take note of financial statements and (iii) give to protection for investors in the capital market.

Water, politics and river basin governance: repoliticizing approaches to river basin management

Water management is commonly assumed to be a mere technical matter where experts and managers endeavour to match supply and demand by using technology, through rational problem-solving and by engaging stakeholders. This article, in contrast, emphasizes that river basin development and management is about the shifting patterns of access to a contested and scarce resource and is inherently a political process. An investigation of the physical and social characteristics and constraints of river basins must be conducted in parallel with an analysis of the convergent interests manifest in capital intensive water investments, and an attention to how discursive power is used in the justification of large-scale investments. Thus, repoliticizing river basin management offers a different and complementary perspective that allows a better understanding of society/environment relationships.

Models and Algorithms for the Design of Service Overlay Networks

Service overlay networks (SONs) can provide end-to-end quality of service guarantees in the Internet without requiring significant changes to the underlying network infrastructure. A SON is an application-layer network operated by a third-party Internet service provider (ISP) that owns a set of overlay nodes, residing in the underlying ISP domains, interconnected by overlay links. The deployment of a SON can be a capital-intensive investment, and hence its planning requires careful decisions, including the overlay nodes' placement, the capacity provisioning of overlay links as well as of access links that connect the end-users to the SON infrastructure. In this paper, we propose two novel optimization models for the planning of SONs. The first model minimizes the SON installation cost while providing full coverage to all network's users. The second model maximizes the SON operator's profit by further choosing which users to serve, based on the expected gain, and taking into consideration budget constraints. We also introduce two efficient heuristics to get near-optimal solutions for largescale instances in a reasonable computation time. We provide numerical results of the proposed models and heuristics on a set of realistic-size instances, and discuss the effect of different parameters on the characteristics of the planned networks. We show that in the considered network scenarios the proposed heuristics perform close to the optimum with a short computing time.

Price negotiation for capacity sharing in a two-factory environment using genetic algorithm

Uncertain and lumpy demand forces capacity planners to maximize the profit of individual factory by simultaneously taking advantage of outsourcing to and/or being outsourced from its supply chain and even competitors. This study develops a resource-planning model of a large manufacturer with two profit-centered factories. The proposed model enables a collaborative integration for resource and demand sharing which is highly attractive to the high-tech industries against the challenges of short product life cycle, intensive capital investment and decreasing marginal profit. Each of the individual factories applies an economic resource-planning model and a genetic algorithm to improve its objective while purchasing extra capacity requirement from its peer factory or selling extra capacity of resources to the others through a negotiation algorithm. This study makes a contribution in successfully building a mutual negotiation model for a set of customer tasks to be realized by the negotiating parties, each with private information regarding company objectives, cost and price. Experimental results reveal that near-optimal solutions for both of the isolated (a single factory) and negotiation-based (between two factories) environments are obtained.

Algorithms and Trade-Offs in Multicast Service Overlay Design

The Multicast Service Overlay Network (MSON) has been recently introduced to address some of the deployment and maintenance problems of IP multicast and application-level multicast. An MSON is essentially a backbone service overlay provisioned by an MSON provider and designed to “multiplex” multiple-user overlays. It consists of service nodes or proxies deployed by the provider. The proxies are strategically deployed to form a backbone overlay and provide multicasting functionalities for supporting many user groups simultaneously. The MSON provider designs the backbone overlay for a large user population and can therefore enjoy large-scale economies and benefits. Since the deployment of an MSON is a capital-intensive investment, it is very imperative to carefully design the MSON so that the provider can make the best revenue out of this investment. In this article, the authors formulate the MSON design problem by taking into account operational costs of the MSON provider. They then explore three subproblems: overlay proxy placement, overlay link selection, and bandwidth dimensioning. For each of these subproblems, the authors present several algorithms and discuss their design trade-offs. By simulations, they investigate the effectiveness of different overlay design algorithms, analyze their impact on multicast performance, and suggest some practical solutions for MSON design.

Growth without Capital: A Renascent Fishery in Zambia and Katanga, 1960s to Recent Times *

Africa's inland fisheries play an increasingly important role in the development of economic opportunities and the provision of food for the continent's poorest communities. Despite their remarkable economic, social and nutritional importance, there have been few attempts to theorise their distinctive political economies and their location within regional economies. The recent history of one of south central Africa's most important commercial inland fisheries, Mweru-Luapula, located on the border of Zambia and the Democratic Republic of Congo (DRC), demonstrates that periods of increased economic productivity and growth during the last 40 years have occurred without large-scale and capital-intensive investments. Medium- to small-scale entrepreneurs with little prospect of salaried employment, many of them migrants from collapsing urban economies or other rural sectors, have been best able to exploit opportunities in the fishery. They joined rural women, who, increasingly deprived of adequate farmlands, became the processors and traders of fish. Together, they have created a new commercial fishing sector. This pattern of investment and rural–urban linkages has become typical of many of southern and central African fisheries in the hinterland of collapsing urban sectors.

Multiple equilibria in a cash-in-advance two-sector economy

We consider a two-sector infinite horizon economy with a fractional cash-in-advance constraint on consumption expenditures. This formulation allows us to consider a steady-state velocity of money that is strictly greater than one and, therefore, provides a more plausible framework than the standard formulation in which all the consumption purchases are paid cash. We prove that the steady state is bound to be indeterminate and multiple equilibria occur when the share of the liquidity constraint is low enough and that a capital-intensive investment good or a strongly capital-intensive consumption good improve considerably the scope for indeterminacy. As a consequence, we show that without any restriction on the elasticity of intertemporal substitution in consumption, multiple equilibria might occur if the velocity of money is greater than a critical bound that is compatible with empirical estimates.

Analysis of priority mix planning for the fabrication of semiconductors under uncertainty

Because of intensive capital investment in semiconductor manufacturing, the priority mix decision plays a critical role for effective administration. The potential value of products, efficiency in the deployment of equipment, and characteristics of cash flow are inherently difficult to be precisely defined and determined by a decision maker. The main objective in this study is therefore to construct an analytical approach for dealing with the aforementioned managerial problems under subjective judgment environments. Thus, we utilized a fuzzy analytic hierarchy process method to deal with uncertainty. Of primary concern are the criteria of product, equipment efficiency, and finance, and detailed criteria are catered to the requirement for further analysis. Finally, a priority mix of strategic alternatives represented by a priority index can be evaluated. A performance ranking of priority mixes can then be generated. The results provide guidance to select strategies for accepting orders with the consideration of manufacturing efficiency and the aspects of product, equipment efficiency and finance. The model is easily understandable and can be followed by administrators to determine the most suitable priority mix for a fabrication process.

The effects of federal transit subsidy policy on investment decisions: The case of San Francisco's Geary Corridor

In the United States, federal funding for public transit often accounts for a large proportion of a local agency's budget, especially for capital investments. For this reason, local governments can be expected to plan a portfolio of projects that maximize federal contributions. This study examines the financial effects of federal transit subsidy policy on local transit investment decisions. Data from a System Planning Study for the Geary Corridor in San Francisco are used as an illustration. It is found that federal transit subsidy policy provides financial incentives for local decision-makers to select capital-intensive investment options that may not be efficient or effective. While federal financial incentives are not the only factor influencing local investment decisions, some reform of the current subsidy policy may be necessary to reduce the incentive for ineffective use of public resources.

Federal ports policy

In contrast to the centralized port-planning framework that is utilized in some industrialized countries, the US relies on a complex and fragmented framework in which responsibility for the planning, development and operation of landside maritime infrastructure rests with State and local governments. It has been argued that the separation of the federal government from port policy was rooted in the port preference clause of the Constitution. This paper is an effort to determine whether the current decentralized port policy in fact stems from the Constitution and, to that end, reviews how over the years the US Supreme Court has construed the port preference clause in the Constitution. It was found that there is no evidence to support the assertion that the port preference clause has restricted the development of Federal port policy. Moreover, the decentralized and fragmented decision-making process that is evident today does not imply the absence of federal impact. Rather, it reflects federal involvement through multiple agencies and regulatory processes and is a conscious effort, consistent with other areas of transport infrastructure development, to retain local decision-making for infrastructure investments. It is concluded by raising the issue whether current federal involvement in ports (that is, existing federal port policy), through dredging, landside transportation improvements or subsidized capital, among other things, needs to be reappraised before a new round of capital intensive investment begins.

Capacity expansion and allocation for a semiconductor testing facility under constrained budget

Semiconductor manufacturing and testing requires intensive capital investment. Practical experiences in this industry indicate that a few savings on capacity may result in millions of benefit per year. This paper focuses on the issues pertaining to (i) what type of and how many testers should be invested for forthcoming orders for wafer and chip of a semiconductor testing facility under budget constraint? and (ii) how to allocate tester capacity for the orders so that the profit of a company can be maximized? This research develops a genetic algorithm simultaneously to resolve the two issues. A mathematical model is constructed and its answer serves as a benchmark. The experimental results show that the proposed algorithm is robust to the change of budgets and algorithm parameters, and the performances are close to the ones provided by the mathematical model.

Financing firms with restricted access to financial markets: the use of trade credit and factoring in Belgium

Many authors emphasize the implications of restricted access to financial markets for both small and new firms. The paper reports investigations into the use of alternative means of financing. More specifically, the use of trade credit and factoring are examined. Indeed, following the trade credit management literature both institutional and macro economic restrictions on small business finance can be overcome by ‘larger suppliers’ extending trade credit to their smaller customers. However, the DSO-rate cannot be used to measure the supplier's willingness to invest in trade credit as it depends on both suppliers' and customers' characteristics. The decision to extend trade credit is therefore approximated by the will to control its management and operationalized by the decision to factor or not to factor. The results of our study are twofold. First, factoring is mainly used by small and medium-sized companies. Moreover, when looking at the characteristics of the factor's customers, new companies facing huge capital expenditure programmes and seasonal sales decide to factor. The prejudice about factoring being a last resort means of finance is, however, not supported: companies that decide to use factoring are indeed less profitable, but this is simply due to their high growth and/or capital intensive investment programmes.

Feasibility of energy saving renovation measures in urban buildings: The impact of energy prices and the acceptable pay back time criterion

The energy renovation of existing buildings is an important tool for the reduction of energy consumption in the building sector, the improvement of prevailing indoor thermal comfort conditions and also for the improvement of environmental conditions in urban areas. At the same time, it is a technical, economic and social problem, due to the way in which many cities have been built and the restrictions imposed by economic constrains that tantalise most countries in South-Eastern Europe, and also Greece. It applies particularly in Northern Greece, with its cold and prolonged heating season, where a series of studies was carried out since 1994 to approach the problem and develop viable proposals. Public and mixed-use buildings form a significant part of the building stock and are therefore a primary candidate for energy saving measures, especially as they also play the role of a ‘pilot-demonstrator’ for the private owned buildings. However, due to the low energy prices that prevailed over the last 10 years, and as energy saving measurements are capital intensive investments, little was done in that direction. The recent sharp increase in oil prices proved that this was a short-sighted policy. In the following paper are presented the results of a study that aimed to determine the potential of energy saving renovation measures, in a representative sample of buildings under realistic conditions, to evaluate the feasibility of these measures, and also the way in which this feasibility is being analysed, under the rapidly changing economic conditions.

Foreign investment, industrial restructuring and dependent development in Singapore

Singapore's industrial development and restructuring are very much dependent on foreign investment. Despite the apparent benefits of foreign investment and Singapore's success in export-oriented manufacturing, there are worrisome aspects arising from the large and growing dependency on such investment in the manufacturing sector as Singapore moves toward a developed country status. This article explores some of the consequences of such dependency. In terms of industrial pattern, foreign investment has created and maintained a dualistic industrial structure in manufacturing. Foreign firms and government industrial policies have suppressed and marginalized local entrepreneurship. Export-oriented industrialization has opened the employment doors for women in manufacturing. However, women are predominantly found in low pay, dead end jobs in the assembly line of Singapore's new industrial order. With the implementation of a new wave of industrial restructuring strategies, new capital and technological intensive foreign investments are welcomed and solicited. However, the local labour supply is unable to meet the increased demands. Foreign labour has been called in to fill the gaps. This inevitably distorts labour market outcomes and heightens the income inequality index.

Irrigation development in the Sahelian Countries: The Kirene District in Senegal

Sahelian decision-makers must discern whether wider adoption of irrigation techniques would relieve the existing food production crisis. This case study of the Kirene District illustrates, how, despite the capital intensive investment, the prevailing design fails to adequately adjust or reform existing institutions so as to provide incentives to farmers. Consequently, the full economic potential of irrigation remains untapped. Vested interests in the status quo to perpetuate the monopoly of the State further compromise the potential benefits that irrigation could provide.

Arbitrage entre croissance interne et externe en France

Trade-off between Internal and external growth In France Some people say, that over the next fifteen years, France didn't make enough productive investments and made too many financial ones. We want to show that things weren 't so simple. In fact, investments under State's control decreased, as well as capital intensive investments and investments in buildings and contracts. But investments in durable productive goods kept up. The sharp increase in financial investments was due to an exceptional combination of factors and seems to have been temporary. About mergers and acquisitions, they don't weaken trench economy, but seem, on the contrary, to be a necessary condition to an efficient revival of direct investment as well as to make up for lost time in the beginning of the eighties. In fact, there was more a kind of sound "revolution" in investment practices, causing quite normally disturbances, than a reduction in investments, especially in productive ones.

A model for simultaneous sensitivity analysis of projects

The present paper deals with the economic evaluation of long-range capital intensive public investment projects. A model is developed that enables the decision marker to envisage in graphical form the entire spectrum of possible outcomes, and to perform simultaneous sensitivity analysis of major economic and structural parameters. Economic feasibility regions, in terms of the project's IRBRs (Internal Rates of Benefit Return), replace the endless disputes about the ‘adequate’ discount rate, highlighting the impact of probable deviation from the expected capital cost and benefit stream. The model is applied to the Mediterranean–Dead Sea Project, one of Israel's largest and most controversial public investment plans.

Yugoslavia at the Edge

Since the beginning of the 1980s, Yugoslavia has been so hard hit by economic crisis that the modern inflationary syndrome has overwhelmed both the triumphs and the pitfalls of its political system. The founder and preeminent leader of the country's socialist regime, Josip Broz Tito, died at the age of eighty-six in May, 1980, just as the effects of worldwide recession and the second oil crisis were reaching a climax. After thirty-five years of leadership, Tito left his multiethnic nation of nations with the superb sense of timing for which he was known. He also left 22 million Yugoslavs—including a million unemployed and a million working outside the country—with rapidly mounting debts to the International Monetary Fund and multinational private banks; dramatic shortages of imported fuel and raw materials; a fiscal crisis caused by overexpansion of state budgets on every level; and the tendency among political leaders of the six semiautonomous Yugoslav republics and two “autonomous” regions to compete among themselves for costly and capital-intensive new investment projects.