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Article
Publication date: 28 November 2019

Morteza Bayat, Mostafa Khanzadi, Farnad Nasirzadeh and Ali Chavoshian

This study aims to determine the optimal value of concession period length in combination with capital structure in build–operate–transfer (BOT) contracts, based on direct…

Abstract

Purpose

This study aims to determine the optimal value of concession period length in combination with capital structure in build–operate–transfer (BOT) contracts, based on direct negotiation procurement and considering the conflicting financial interests of different parties involved in the project.

Design/methodology/approach

The financial model of a BOT project is developed considering all the influencing factors. Then, fuzzy set theory is used to take into account the existing risks and uncertainties. Bilateral bargaining game based on alternating-offers protocol is applied between the government and the sponsor to divide project financial benefit considering the lender’s requirements. Finally, concession period and equity level will be determined simultaneously according to the sponsor’s and government’s share of project financial benefit and the lender’s requirements.

Findings

The proposed model is implemented on a real case study, and a fair and efficient agreement on concession period length and capital structure is achieved between the government and the sponsor considering the lender’s requirements. It is revealed that being the first proposer in the bargaining process will affect the concession period length; however, it will not affect the equity level. Moreover, it is shown that considering income tax as a part of government’s financial benefit increases the length of concession period.

Research limitations/implications

The presented model concentrates on direct negotiation procurement in BOT projects where the sponsor and government bargain on dividing financial benefits of project. It is assumed that the product/service price is determined before according to market analysis or users’ affordability. All the revenue of project during concession period is assumed to belong to the sponsor.

Practical implications

The proposed model provides a practical tool to aid BOT participants to reach a fair and efficient agreement on concession period and capital structure. This could prevent failing or prolonging the negotiation and costly renegotiation.

Originality/value

By investigation of previous studies, it is revealed that none of them can determine the optimal value of concession period length and capital structure simultaneously considering the BOT negotiation process and different financial interests of parties involved in the project. The proposed model presents a new approach to determine the financial variables considering the conflicting interests of involved parties. The other novelty aspects of the presented model are as follows: introducing a new approach for calculating the sponsor and the government’s share of project financial benefit that will affect the determination of the concession period length and considering the effect of existing risks and uncertainties on final agreement between the involved parties using fuzzy set theory.

Details

Construction Innovation , vol. 20 no. 1
Type: Research Article
ISSN: 1471-4175

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Article
Publication date: 16 March 2012

Rasmus K. Storm

The purpose of this paper is to argue for the necessity of regulating European club football financially, in order to create a fair structure of sporting competition.

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1581

Abstract

Purpose

The purpose of this paper is to argue for the necessity of regulating European club football financially, in order to create a fair structure of sporting competition.

Design/methodology/approach

By deploying the soft budget constraint approach – originally developed by Hungarian Economist János Kornai in order to understand (public) business behavior in socialist and post‐socialist economies – and combining it with empirical analysis, the paper develops an understanding of why the majority of European top league clubs are loss‐makers and why regulation is needed. The paper rests on its application of the soft budget constraint approach to build its argument and uses existing empirical research in order to support it within the field of European professional football.

Findings

The paper finds substantial evidence of soft budget constraints in professional football clubs, and argues that softness punishes the few financially well‐managed clubs in sporting terms for balancing their books.

Research limitations/implications

From a theoretical point of view, the new perspective of soft budget constraints takes political, cultural and emotional aspects into account in order to understand economic behavior among professional team sports clubs. This gives promising new insights into the discipline of sports economics and sports management.

Practical implications

The paper's findings demand action to be taken to secure financial fair play in order to deal with issues of equal sporting competition. It argues that this must be done through a central regulation scheme covering all European leagues, thus endorsing the new UEFA financial fair play program. At the same time, however, the paper recognizes the problems in implementing the program efficiently.

Originality/value

The originality and value of the paper is its application of a new theoretical approach that clarifies the problems of European professional football and the reasons why regulatory solutions are necessary to harden the budget constraints.

Details

Sport, Business and Management: An International Journal, vol. 2 no. 1
Type: Research Article
ISSN: 2042-678X

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Article
Publication date: 31 May 2021

Na Zhang, Xiaopeng Deng, Bon-Gang Hwang, Muchao Bi and Amin Mahmoudi

This paper aims to develop a partner selection approach for the high-speed rail (HSR) firms from the perspective of achieving competitive advantage in the international…

Abstract

Purpose

This paper aims to develop a partner selection approach for the high-speed rail (HSR) firms from the perspective of achieving competitive advantage in the international competitive bidding sphere.

Design/methodology/approach

The current study developed a partner selection approach based on the evolutionary game theory. Firstly, the current study identified the influencing variables and logical formation path of competitive advantage on the international HSR project by literature review and case analysis. After that, a pay-off model was developed based on the theoretical foundation. Meanwhile, the evolutionary stable strategy was analyzed for different combinations of initial pay-offs.

Findings

A real-world case was simulated to verify the effectiveness of the developed approach. The simulation results secured support from three industry professionals, indicating the developed approach is valid.

Originality/value

The current study can help HSR firms to select their partners and develop a cooperation strategy from the perspective of winning awards. Also, the proposed approach is based on the advantage driving variables and formation path, which can contribute to HSR firms' understanding of the sources of competitive advantage.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

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Article
Publication date: 17 February 2012

Kate Vitasek and Karl Manrodt

Research and studies of successful, collaborative outsourcing relationships have uncovered commonalities that researchers codified into a methodology designed to structure…

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3862

Abstract

Purpose

Research and studies of successful, collaborative outsourcing relationships have uncovered commonalities that researchers codified into a methodology designed to structure aligned, innovative and cooperative outsourcing arrangements. This paper aims to describe a new methodology for establishing successful collaborative outsourcing relationships.

Design/methodology/approach

The design is based on seven years of field research into successful strategic outsourcing agreements completed by the authors and additional colleagues.

Findings

Research into successful collaborative outsourcing relationships has uncovered commonalities that researchers have identified as normative rules which, when followed, lead to aligned, innovative and cooperative relationships. This paper identifies five rules and ten elements that together form a flexible framework for implementing an effective outsourcing partnership. This approach is called “vested outsourcing” because the nature of most highly successful relationships is based on a high degree of collaboration and aligned incentives where the buyer and supplier have a vested interest in each other's success.

Originality/value

The conclusions and principles derived from the original research and fieldwork are described in two books (Vested Outsourcing: Five Rules that Will Transform Outsourcing and The Vested Outsourcing Manual). This paper provides a review of the authors' current research, rather than new research findings.

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Article
Publication date: 21 December 2020

Aalok Kumar and Ramesh Anbanandam

Freight transportation practices accounted for a significant share of environmental degradation and climate change over the years. Therefore, environmentally responsible…

Abstract

Purpose

Freight transportation practices accounted for a significant share of environmental degradation and climate change over the years. Therefore, environmentally responsible transport practices (ERTPs) become a serious concern of freight shippers and transport service providers. Past studies generally ignored the assessment of ERTPs of freight transport companies during a transport service contract. To bridge the above literature gap, this paper proposed a hierarchical framework for evaluating freight transport companies based on ERTPs.

Design/methodology/approach

In a data-driven decision-making environment, transport firm selection is affected by multiple expert inputs, lack of information availability, decision-making ambiguity and background of experts. The evaluation of such decisions requires a multi-criteria decision-making method under a group decision-making approach. This paper used a data-driven method based on the intuitionistic fuzzy-set-based analytic hierarchy process (IF-AHP) and VIseKriterijumska Kompromisno Rangiranje (IF-VIKOR) method. The applicability of the proposed framework is validated with the Indian freight transport industry.

Findings

The result analysis shows that environmental knowledge sharing among freight transport actors, quality of organizations human resource, collaborative green awareness training programs, promoting environmental awareness program for employees and compliance of government transport emission law and practice have been ranked top five ERTPs which significantly contribute to the environmental sustainability of freight transport industry. The proposed framework also ranked freight transport companies based on ERTPs.

Research limitations/implications

This research is expected to provide a reference to develop ERTPs in the emerging economies freight transport industry and contribute to the development of a sustainable freight transport system.

Originality/value

This study assesses the environmental responsibility of the freight transportation industry. The emerging economies logistics planners can use proposed framework for assessing the performance of freight transportation companies based on ERTPs.

Details

Journal of Enterprise Information Management, vol. 34 no. 1
Type: Research Article
ISSN: 1741-0398

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Article
Publication date: 10 June 2021

Hande Yavuz

Python codes are developed for the versatile structural analysis on a 3 spar multi-cell box beam by means of idealization approach.

Abstract

Purpose

Python codes are developed for the versatile structural analysis on a 3 spar multi-cell box beam by means of idealization approach.

Design/methodology/approach

Shear flow distribution, stiffener loads, location of shear center and location of geometric center are computed via numpy module. Data visualization is performed by using Matplotlib module.

Findings

Python scripts are developed for the structural analysis of multi-cell box beams in lieu of long hand solutions. In-house developed python codes are made available to be used with finite element analysis for verification purposes.

Originality/value

The use of python scripts for the structural analysis provides prompt visualization, especially once dimensional variations are concerned in the frame of aircraft structural design. The developed python scripts would serve as a practical tool that is widely applicable to various multi-cell wing boxes for stiffness purposes. This would be further extended to the structural integrity problems to cover the effect of gaps and/or cut-outs in shear flow distribution in box-beams.

Details

Aircraft Engineering and Aerospace Technology, vol. 93 no. 5
Type: Research Article
ISSN: 1748-8842

Keywords

Content available
Article
Publication date: 16 March 2021

Tomi Rajala and Petra Kokko

This study examines unexplored horizontal accountability types between public, private and third sector actors within a hybrid organization. The case organization was…

Abstract

Purpose

This study examines unexplored horizontal accountability types between public, private and third sector actors within a hybrid organization. The case organization was applying a novel alliance model to generate service paths for heterogeneous clientele consuming cultural, educational, health and social services. It was first to do so in Finland.

Design/methodology/approach

This research is on a case study that used documents and interviews to examine the design of the horizontal accountability. The descriptive analysis focused on identifying what type of formal accountability system was designed (i.e. who is the account holder, and who is accountable and for what and why).

Findings

An imbalanced accountability system was identified because accountability obligations were unevenly distributed between public, private and third sector actors. The private sector was the most accountable for performance, and the third sector (i.e. voluntary sector) was the least accountable. As account holders, the public, private and third sector actors were judging their conduct as account providers. This created a biased horizontal accountability system. The hybrid's accountability system was dynamic because the contracts made to establish the hybrid included opportunities to change horizontal accountability if future changes to the external environment affect too drastically the potential to achieve the hybrid's goals.

Originality/value

Three new concepts are proposed for studying dysfunctional accountability systems: dynamic, biased and horizontally imbalanced accountability.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 September 2021

Afiqah R. Radzi, Rahimi A. Rahman and Shu Ing Doh

Various approaches have emerged to assist practitioners in making more informed decisions in highway construction projects. However, industry practitioners are still using…

Abstract

Purpose

Various approaches have emerged to assist practitioners in making more informed decisions in highway construction projects. However, industry practitioners are still using subjective ways to make decisions. Also, researchers have developed tools and techniques with similar objectives. Lack of information on what has been developed might lead to those issues. Therefore, this paper aims to review trends of evolution, pinpoint strengths and gaps in the literature and identifies potential future directions for decision-making research in highway construction projects.

Design/methodology/approach

A systematic review was conducted on published articles on decision-making in highway construction projects using the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) technique.

Findings

The analysis of 101 articles revealed that existing decision-making research in highway construction projects targets improvements in four areas: feasibility, conceptual, detailed scope and detailed design. The four areas consist of sixteen subthemes that are detailed in this study. In addition, most research involved developing decision support tools and systems as well as decision-making models, techniques and frameworks. Lastly, several research areas have emerged, such as adding more decision criteria including those with uncertainties, expanding existing decision-making models into decision support systems, benchmarking decision criteria between different sample populations and exploring inter-and intra-relationships between decision criteria.

Originality/value

This paper provides an overview of existing research on decision-making in highway construction projects. Also, it reveals research gaps in the body of knowledge to point out directions for future research. Finally, industry practitioners can use the findings to develop strategies for effective decision-making processes.

Details

Journal of Engineering, Design and Technology , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1726-0531

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Article
Publication date: 21 June 2019

Yuning Wang and Xiaohua Jin

Various factors may influence project finance when a multi-sourced debt financing strategy is used for financing capital investments, in general, and public infrastructure…

Abstract

Purpose

Various factors may influence project finance when a multi-sourced debt financing strategy is used for financing capital investments, in general, and public infrastructure investments, in particular. Traditional indicators lack comprehensive consideration of the influences of many internal and external factors, such as investment structure, financing mode and credit guarantee structure, which exist in the financing decision making of BOT projects. An effective approach is, thus, desired. The paper aims to discuss these issues.

Design/methodology/approach

This paper develops a financial model that uses an interval number to represent the uncertain factors and, subsequently, conducts a standardization of the interval number. Decision makers determine the weight of each objective through the analytic hierarchy process. Through the optimization procedure, project investors and sponsors are provided with a strategy regarding the optimal amount of debt to be raised and the insight on the risk level based on the net present value, as well as the probability of bankruptcy for each different period of debt service.

Findings

By using an example infrastructure project in China and based on the comprehensive evaluation, comparison and ranking of the capital structures of urban public infrastructure projects using the interval number method, the final ranking can help investors to choose the optimal capital structure for investment. The calculation using the interval number method shows that X2 is the optimal capital structure plan for the BOT project of the first stage of Tianjin Binhai Rail Transit Z4 line. Therefore, investors should give priority to selecting a capital contribution ratio of 45 per cent for this investment.

Research limitations/implications

In this paper, some parameters, such as depreciation life, construction period and concession period, are assumed to be deterministic parameters, although the interval number model has been introduced to analyze the uncertainty indicators, such as total investment and passenger flow, of BOT rail transport projects. Therefore, more of the above deterministic parameters can be taken as uncertainty parameters in future research so that calculation results fit actual projects more closely.

Originality/value

This model can be used to make the optimal investment decision for a project by determining the impact of uncertainty factors on the profitability of the project in its lifecycle during the project financial feasibility analysis. Project sponsors can determine the optimal capital structure of a project through an analysis of the irregular fluctuation of the unpredictable factors in project construction such as construction investment, operating cost and passenger flow. The model can also be used to examine the effects of different capital investment ratios on indicators so that appropriate measures can be taken to reduce risks and maximize profit.

Details

Engineering, Construction and Architectural Management, vol. 26 no. 7
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 28 June 2013

Andreas Wibowo and Hans Wilhelm Alfen

The present paper aims to introduce a new methodology taking risk behavior of decision maker into account to fine‐tune the value of a risky public‐private‐partnership…

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1305

Abstract

Purpose

The present paper aims to introduce a new methodology taking risk behavior of decision maker into account to fine‐tune the value of a risky public‐private‐partnership (PPP) project and the corresponding cost of capital based on the target rate of return set by the project sponsor and the degree of project risks.

Design/methodology/approach

The proposed methodology combines the cumulative prospect theory (CPT) to characterize the risk preference of the project sponsor and the Monte Carlo simulation to assess the project riskiness. The methodology requires a pre‐set target rate of return that will define the relative gains and losses for a prospect theory project sponsor. The application was illustrated using a build/operate/transfer toll road project as a case study.

Findings

As the project sponsor sets a greater target return, the probability of the project not meeting the target is accordingly greater. Given that losses have greater impact than gains on the decision, other things being equal, a higher target return leads to a higher value correction. It has also been demonstrated that the corresponding project's cost of capital can be up‐ or downadjusted depending on the project's riskiness which may result in a reverse preference to favor a higher risk scenario.

Research limitations/implications

The methodology uses the CPT parameters that need to be further confirmed and validated if applied to value large risky projects like PPP investments.

Originality/value

The proposed methodology offers a different approach to correctly value a risky PPP project by extending the application of the cumulative prospect theory that well explains the irrationality of human decision behavior under risk into a financial decision‐making process. It takes the full benefit of simulation to understand project risks and also assists financial decision‐making.

Details

Engineering, Construction and Architectural Management, vol. 20 no. 4
Type: Research Article
ISSN: 0969-9988

Keywords

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