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Full-Text Articles in Business
Subcontracting And Rework Cost Sharing In Engineering-Procurement-Construction Projects, Zhenzhen Chen, Wanshan Zhu, Pascale Crama
Subcontracting And Rework Cost Sharing In Engineering-Procurement-Construction Projects, Zhenzhen Chen, Wanshan Zhu, Pascale Crama
Research Collection Lee Kong Chian School Of Business
Infrastructure development projects are overwhelmingly managed through engineering–procurement–construction (EPC) contracts, which allow a project end user to shift all project risks to a contractor. Accordingly, the International Federation of Consulting Engineers recommended a contract template based on a lump-sum contract between the end user and main contractor. However, EPC projects often suffer from quality issues due to moral hazard, which is aggravated by the involvement of subcontractors hired by the main contractor to perform parts of the project. Besides, costly rework is frequently needed to achieve the contractually mandated quality. When the main contractor must share some of the subcontractor’s …
Inducing Compliance With Postmarket Studies For Drugs Under Fda's Accelerated Approval Pathway, Liang Xu, Hui Zhao, Nicholas C. Petruzzi
Inducing Compliance With Postmarket Studies For Drugs Under Fda's Accelerated Approval Pathway, Liang Xu, Hui Zhao, Nicholas C. Petruzzi
Research Collection Lee Kong Chian School Of Business
Problem definition: In 1992, the Food and Drug Administration (FDA) instituted the accelerated approval pathway (AP) to allow promising drugs to enter the market based on limited evidence of efficacy, thereby permitting manufacturers to verify true clinical benefits through postmarket studies. However, most postmarket studies have not been completed as promised. We address this noncompliance problem. Academic/practical relevance: The prevalence of this noncompliance problem poses considerable public health risk, thus compromising the original purpose of a well-intentioned AP initiative. We provide an internally consistent and implementable solution to the problem through a comprehensive analysis of the myriad complicating factors and …
Effect Of Credit Ratings On Airport Financing And Management, Kazusei Kato, Koichiro Tezuka, Joyce M. W. Low
Effect Of Credit Ratings On Airport Financing And Management, Kazusei Kato, Koichiro Tezuka, Joyce M. W. Low
Research Collection Lee Kong Chian School Of Business
This paper analyzes the effect of airport ownership structure on management efficiency as reflected through their credit ratings. A game-theoretical model is proposed to examine the role of credit ratings in mitigating the moral hazard problem of public-owned airports. The analytical results derived from the model are then used to supplement a supporting case study. Notwithstanding the fact that the less competitive environment of a public-owned entity and its credit ratings might bring some welfare loss , this research concludes that public-owned airports have some advantages.
Milestone Payments Or Royalties? Contract Design For R&D Licensing, Pascale Crama, Bert De Reyck, Zeger Degraeve
Milestone Payments Or Royalties? Contract Design For R&D Licensing, Pascale Crama, Bert De Reyck, Zeger Degraeve
Research Collection Lee Kong Chian School Of Business
We study how innovators can optimally design licensing contracts when there is incomplete information on the licensee's valuation of the innovation, and limited control over the licensee's development efforts. A licensing contract typically contains an up-front payment, milestone payments at successful completion of a project phase, and royalties on sales. We use principal-agent models to formulate the licensor's contracting problem, and we find that under adverse selection, the optimal contract structure changes with the licensee's valuation of the innovation. As the licensee's valuation increases, the licensor's optimal level of involvement in the development-directly or through royalties-should decrease. Only a risk-averse …