Corporate Funding on the European Debt Capital Market

The integrated European debt capital market has undoubtedly broadened the possibilities for companies to access funding from the public and challenged investors to cope with an ever increasing complexity of its market participants. Well into the Euro-era, it is clear that the unified market has created potential for all involved parties, where investment opportunities are able to meet a supply of funds from a broad geographical area now summoned under a single currency. Europe’s traditionally heavy dependency on bank lending as a source of debt capital has thus been easing as corporate residents are able to tap into a deep and liquid capital market to satisfy their funding needs. As national barriers eroded with the inauguration of the Euro and interest rates for the EMU-members converged towards over-all lower yields, a new source of debt capital emerged to the vast majority of corporate residents under the new currency and gave an alternative to the traditionally more maturity-restricted bank debt. With increased sophistication came also an improved knowledge and understanding of the market and its participants. Further, investors became more willing to bear credit risk, which opened the market for firms of ever lower creditworthiness. In the process, the market as a whole saw a change in the profile of issuers, as non-financial firms increasingly sought their funding directly from the bond market. This thesis consists of three separate empirical studies on how corporates fund themselves on the European debt capital markets. The analysis focuses on a firm’s access to and behaviour on the capital market, subsequent the decision to raise capital through the issuance of arm’s length debt on the bond market. The specific areas considered are contributing to our knowledge in the fields of corporate finance and financial markets by considering explicitly firms’ primary market activities within the new market area. The first essay explores how reputation of an issuer affects its debt issuance. Essay two examines the choice of interest rate exposure on newly issued debt and the third and final essay explores pricing anomalies on corporate debt issues.

ICT and the Shaping of Society: Exploring Human -ICT Relationships in Everyday Life (summary section only)

This thesis explores the relationship between humans and ICTs (information and communication technologies). As ICTs are increasingly penetrating all spheres of social life, their role as mediators – between people, between people and information, and even between people and the natural world – is expanding, and they are increasingly shaping social life. Yet, we still know little of how our life is affected by their growing role. Our understanding of the actors and forces driving the accelerating adoption of new ICTs in all areas of life is also fairly limited. This thesis addresses these problems by interpretively exploring the link between ICTs and the shaping of society at home, in the office, and in the community. The thesis builds on empirical material gathered in three research projects, presented in four separate essays. The first project explores computerized office work through a case study. The second is a regional development project aiming at increasing ICT knowledge and use in 50 small-town families. In the third, the second project is compared to three other longitudinal development projects funded by the European Union. Using theories that consider the human-ICT relationship as intertwined, the thesis provides a multifaceted description of life with ICTs in contemporary information society. By oscillating between empirical and theoretical investigations and balancing between determinist and constructivist conceptualisations of the human-ICT relationship, I construct a dialectical theoretical framework that can be used for studying socio-technical contexts in society. This framework helps us see how societal change stems from the complex social processes that surround routine everyday actions. For example, interacting with and through ICTs may change individuals’ perceptions of time and space, social roles, and the proper ways to communicate – changes which at some point in time result in societal change in terms of, for example, new ways of acting and knowing things.

Understanding Customer Loyalty and Disloyalty The Effect of Loyalty-Supporting and -Repressing Factors (first edition sold out, 'print on demand' 60 €)

Customer loyalty has been a central topic of both marketing theory and practice for several decades. Customer disloyalty, or relationship ending, has received much less attention. Despite the close relation between customer loyalty and disloyalty, they have rarely been addressed in the same study. The thesis bridges this gap by focusing on both loyal and disloyal customers and the factors characterising them. Based on a qualitative study of loyal and disloyal bank customers in the Finnish retail banking market, both factors that are common to the groups and factors that differentiate between them are identified. A conceptual framework of factors that affect customer loyalty or disloyalty is developed and used to analyse the empirical data. According to the framework, customers’ loyalty status (behavioural and attitudinal loyalty) is influenced by positive, loyalty-supporting, and negative, loyalty-repressing factors. Loyalty-supporting factors either promote customer dedication, making the customer want to remain loyal, or act as constraints, hindering the customer from switching. Among the loyalty-repressing factors it is especially important to identify those that act as triggers of disloyal behaviour, making customers switch service providers. The framework further suggests that by identifying the sources of loyalty-supporting and -repressing factors (the environment, the provider, the customer, the provider-customer interaction, or the core service) one can determine which factors are within the control of the service provider. Attitudinal loyalty is approached through a customer’s “feeling of loyalty”, as described by customers both orally and graphically. By combining the graphs with behavioural loyalty, seven customer groups are identified: Stable Loyals, Rescued Loyals, Loyals at Risk, Positive Disloyals, Healing Disloyals, Fading Disloyals, and Abrupt Disloyals. The framework and models of the thesis can be used to analyse factors that affect customer loyalty and disloyalty in different service contexts. Since the empirical study was carried out in a retail bank setting, the thesis has managerial relevance especially for banks. Christina Nordman is associated with CERS, Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration. The doctoral thesis is part of the Göran Collert Research Project in Customer Relationships and Retail Banking and has been funded by The Göran Collert Foundation.

A Relationship Mediated Theory of Internal Marketing (summary section only)

This report presents a new theory of internal marketing. The thesis has developed as a case study in retrospective action research. This began with the personal involvement of the author in an action research project for customer service improvement at a large Australian retail bank. In other words, much of the theory generating ‘research’ took place after the original project ‘action’ had wound down. The key theoretical proposition is that internal marketing is a relationship development strategy for the purpose of knowledge renewal. In the banking case, exchanges of value between employee participants emerged as the basis for relationship development, with synergistic benefits for customers, employees and the bank. Relationship development turned out to be the mediating variable between the learning activity of employee participants at the project level and success in knowledge renewal at the organisational level. Relationship development was also a pivotal factor in the motivation and customer consciousness of employees. The conclusion reached is that the strength of relationship-mediated internal marketing is in combining a market focused commitment and employee freedom in project work to achieve knowledge renewal. The forgotten truth is that organisational knowledge can be renewed through dialogue and learning, through being trustworthy, and by gaining the trust of employees in return.

Bank Run Risk and Optimal Reserves

We characterize the optimal reserves, and the generated probability of a bank run, as a function of the penalty imposed by the central bank, the probability of depositors’ liquidity needs, and the return on outside investment opportunities.

Management of bushland vegetation using rainwater harvesting in eastern Kenya.

Microcatchment water harvesting (MCWH) improved the survival and growth of planted trees on heavy soils in eastern Kenya five to six years after planting. In the best method, the cross-tied furrow microcatchments, the mean annual increments (MAI; based on the average biomass of living trees multiplied by tree density and survival) of the total and usable biomass in Prosopis juliflora were 2787 and 1610 kg ha-1 a-1 respectively, when the initial tree density was 500 to 1667 trees per hectare. Based on survival, the indigenous Acacia horrida, A. mellifera and A. zanzibarica were the most suitable species for planting using MCWH. When both survival and yield were considered, a local seed source of the introduced P. juliflora was superior to all other species. The MAI in MCWH was at best distinctly higher than that in the natural vegetation (163­307 and 66­111 kg ha-1 a-1 for total and usable biomass respectively); this cannot satisfy the fuelwood demand of concentrated populations, such as towns or irrigation schemes. The density of seeds of woody species in the topsoil was 40.1 seeds m-2 in the Acacia-Commiphora bushland and 12.6 seeds m-2 in the zone between the bushland and the Tana riverine forest. Rehabilitation of woody vegetation using the soil seed bank alone proved difficult due to the lack of seeds of desirable species. The regeneration and dynamics of woody vegetation were also studied both in cleared and undisturbed bushland. A sub-type of Acacia-Commiphora bushland was identified as Acacia reficiens bushland, in which the dominant Commiphora species is C. campestris. Most of the woody species did not have even-aged populations but cohort structures that were skewed towards young individuals. The woody vegetation and the status of soil nutrients were estimated to recover in 15­20 years on Vertic Natrargid soils after total removal of above-ground vegetation.

Monetary policy rules and estimated reaction functions for the European Central Bank

This thesis studies the interest-rate policy of the ECB by estimating monetary policy rules using real-time data and central bank forecasts. The aim of the estimations is to try to characterize a decade of common monetary policy and to look at how different models perform at this task.The estimated rules include: contemporary Taylor rules, forward-looking Taylor rules, nonlinearrules and forecast-based rules. The nonlinear models allow for the possibility of zone-like preferences and an asymmetric response to key variables. The models therefore encompass the most popular sub-group of simple models used for policy analysis as well as the more unusual non-linear approach. In addition to the empirical work, this thesis also contains a more general discussion of monetary policy rules mostly from a New Keynesian perspective. This discussion includes an overview of some notable related studies, optimal policy, policy gradualism and several other related subjects. The regression estimations are performed with either least squares or the generalized method of moments depending on the requirements of the estimations. The estimations use data from both the Euro Area Real-Time Database and the central bank forecasts published in ECB Monthly Bulletins. These data sources represent some of the best data that is available for this kind of analysis. The main results of this thesis are that forward-looking behavior appears highly prevalent, but that standard forward-looking Taylor rules offer only ambivalent results with regard to inflation. Nonlinear models are shown to work, but on the other hand do not have a strong rationale over a simpler linear formulation. However, the forecasts appear to be highly useful in characterizing policy and may offer the most accurate depiction of a predominantly forward-looking central bank. In particular the inflation response appears much stronger while the output response becomes highly forward-looking as well.

“And now to the rest of the trash…” Representations of begging Roma and an ideal society in two Nordic newspapers

Since begging East European Roma became a common view in the streets of larger Nordic cities, vivid discussions about their presence and activities have been carried out in the mass media. This thesis examines the public debates in Finland and Norway through a discursive analysis and comparison of press content from the two countries. The aim of the study is firstly to identify the prominent discourses which construct certain images of the beggars, as well as the elements and internal logics that these discourses are constructed around. But in addition to scrutinizing representations of the Roma, also an opposite perspective is applied. In accordance with the theoretical concept of ‘othering’, debates about ‘them’ are assumed to simultaneously reveal something significant about ‘us’. The second research question is thus what kind of images of the ideal Finnish and Norwegian societies are reflected in the data, and which societal values are salient in these images. The analysis comprises 79 texts printed in the main Finnish and Norwegian quality newspapers; Helsingin Sanomat and Aftenposten. The data consists of news articles, editorials, columns and letters to the editor from a three-month period in the summer of 2010. The analysis was carried out within the theoretical and methodological framework of critical discourse analysis as outlined by Norman Fairclough. A customized nine-step coding scheme was developed in order to reach the most central dimensions of the texts. Seven main discourses were identified; the Deprivation-solidarity, Human rights, Order, Crime, Space and majority reactions, Authority control, and Authority critique discourse. These were grouped into two competing normative stances on what an ideal society looks like; the exclusionary and the inclusionary stance. While the exclusionary stance places the begging Roma within a frame of crime, illegitimate use of public space and threat to the social order, the other advocates an attitude of solidarity and humanitarian values. The analysis points to a dominance of the former, although it is challenged by the latter. The Roma are “individualized” by quoting and/or presenting them by name in a fair part of the Finnish news articles. In Norway, the opposite is true; there the beggars are dominantly presented as anonymous and passive. Overall, the begging Roma are subjected to a double bind as they are faced with simultaneous expectations of activity and passivity. Theories relating to moral panics and ‘the good enemy’ provide for a deepened understanding of the intensity of the debates. Keywords: East European Roma, begging, media, newspapers, Helsingin Sanomat, Aftenposten, critical discourse analysis, Norman Fairclough, othering, ideal society, moral panics, good enemy, double bind, Finland, Norway