Essays on Stock Options, Incentives, and Managerial Action

Executive compensation and managerial behavior have received an increasing amount of attention in the financial economics literature since the mid 1970s. The purpose of this thesis is to extend our understanding of managerial compensation, especially how stock option compensation is linked to the actions undertaken by the management. Furthermore, managerial compensation is continuously and heatedly debated in the media and an emerging consensus from this discussion seems to be that there still exists gaps in our knowledge of optimal contracting. In Finland, the first executive stock options were introduced in the 1980s and throughout the last 15 years it has become increasingly popular for Finnish listed firms to use this type of managerial compensation. The empirical work in the thesis is conducted using data from Finland, in contrast to most previous studies that predominantly use U.S. data. Using Finnish data provides insight of how market conditions affect compensation and managerial action and provides an opportunity to explore what parts of the U.S. evidence can be generalized to other markets. The thesis consists of four essays. The first essay investigates the exercise policy of the executive stock option holders in Finland. In summary, Essay 1 contributes to our understanding of the exercise policies by examining both the determinants of the exercise decision and the markets reaction to the actual exercises. The second essay analyzes the factors driving stock option grants using data for Finnish publicly listed firms. Several agency theory based variables are found to have have explanatory power on the likelihood of a stock option grant. Essay 2 also contributes to our understanding of behavioral factors, such as prior stock return, as determinants of stock option compensation. The third essay investigates the tax and stock option motives for share repurchases and dividend distributions. We document strong support for the tax motive for share repurchases. Furthermore, we also analyze the dividend distribution decision in companies with stock options and find a significant difference between companies with and without dividend protected options. We thus document that the cutting of dividends found in previous U.S. studies can be avoided by dividend protection. In the fourth essay we approach the puzzle of negative skewness in stock returns from an altogether different angle than in previous studies. We suggest that negative skewness in stock returns is generated by management disclosure practices and find proof for this. More specifically, we find that negative skewness in daily returns is induced by returns for days when non-scheduled firm specific news is disclosed.

Customer Relationship Dissolution - What Do We Know and What Do We Need to Know?

Our paper can be seen as a supplement to Halinen-Kaila and Tähtinen' s (2000) review of different direct research approaches on the ending of exchange relationships. Our purpose is to illuminate the borderline between research explicitly focusing on ending and research implicitly considering ending of relationships. Another purpose is to give an overview of how researchers within the Nordic School of Service Management and Nordic School of Relationship Marketing have approached customer relationship ending. A third purpose is to put forward a managerial perspective and managerial issues related to relationship ending. Finally we present some conclusions regarding further research avenues concerning relationship ending.

University Students' Approaches to Learning, Self-Regulation, and Cognitive and Attributional Strategies : Connections with Well-Being and Academic Success

This dissertation empirically explores the relations among three theoretical perspectives: university students approaches to learning, self-regulated learning, as well as cognitive and attributional strategies. The relations were quantitatively studied from both variable- and person-centered perspectives. In addition, the meaning that students gave to their disciplinary choices was examined. The general research questions of the study were: 1) What kinds of relationships exist among approaches to learning, regulation of learning, and cognitive and attributional strategies? What kinds of cognitive-motivational profiles can be identified among university students, and how are such profiles related to study success and well-being? 3) How do university students explain their disciplinary choices? Four empirical studies addressed these questions. Studies I, II, and III were quantitative, applying self-report questionnaires, and Study IV was qualitative in nature. Study I explored relations among cognitive strategies, approaches to learning, regulation of learning, and study success by using correlations and a K-means cluster analysis. The participants were 366 students from various faculties at different phases of their studies. The results showed that all the measured constructs were logically related to each other in both variable- and person-centered approaches. Study II further examined what kinds of cognitive-motivational profiles could be identified among first-year university students (n=436) in arts, law, and agriculture and forestry. Differences in terms of study success, exhaustion, and stress among students with differing profiles were also looked at. By using a latent class cluster analysis (LCCA), three groups of students were identified: non-academic (34%), self-directed (35%), and helpless students (31%). Helpless students reported the highest levels of stress and exhaustion. Self-directed students received the highest grades. In Study III, cognitive-motivational profiles were identified among novice teacher students (n=213) using LCCA. Well-being, epistemological beliefs, and study success were looked at in relation to the profiles. Three groups of students were found: non-regulating (50%), self-directed (35%), and non-reflective (22%). Self-directed students again received the best grades. Non-regulating students reported the highest levels of stress and exhaustion, the lowest level of interest, and showed the strongest preference for certain and practical knowledge. Study IV, which was qualitative in nature, explored how first-year students (n = 536 ) in three fields of studies, arts, law, and veterinary medicine explained their disciplinary choices. Content analyses showed that interest appeared to be a common concept in students description of their choices across the three faculties. However, the objects of interest of the freshmen appeared rather unspecified. Veterinary medicine and law students most often referred to future work or a profession, whereas only one-fifth of the arts students did so. The dissertation showed that combining different theoretical perspectives and methodologies enabled us to build a rich picture of university students cognitive and motivational predispositions towards studying and learning. Further, cognitive-emotional aspects played a significant role in studying, not only in relation to study success, but also in terms of well-being. Keywords: approaches to learning, self-regulation, cognitive and attributional strategies, university students

Novel Approaches to the Sampling of Atmospheric Aerosols and Determination of Chemical Composition

The Earth s climate is a highly dynamic and complex system in which atmospheric aerosols have been increasingly recognized to play a key role. Aerosol particles affect the climate through a multitude of processes, directly by absorbing and reflecting radiation and indirectly by changing the properties of clouds. Because of the complexity, quantification of the effects of aerosols continues to be a highly uncertain science. Better understanding of the effects of aerosols requires more information on aerosol chemistry. Before the determination of aerosol chemical composition by the various available analytical techniques, aerosol particles must be reliably sampled and prepared. Indeed, sampling is one of the most challenging steps in aerosol studies, since all available sampling techniques harbor drawbacks. In this study, novel methodologies were developed for sampling and determination of the chemical composition of atmospheric aerosols. In the particle-into-liquid sampler (PILS), aerosol particles grow in saturated water vapor with further impaction and dissolution in liquid water. Once in water, the aerosol sample can then be transported and analyzed by various off-line or on-line techniques. In this study, PILS was modified and the sampling procedure was optimized to obtain less altered aerosol samples with good time resolution. A combination of denuders with different coatings was tested to adsorb gas phase compounds before PILS. Mixtures of water with alcohols were introduced to increase the solubility of aerosols. Minimum sampling time required was determined by collecting samples off-line every hour and proceeding with liquid-liquid extraction (LLE) and analysis by gas chromatography-mass spectrometry (GC-MS). The laboriousness of LLE followed by GC-MS analysis next prompted an evaluation of solid-phase extraction (SPE) for the extraction of aldehydes and acids in aerosol samples. These two compound groups are thought to be key for aerosol growth. Octadecylsilica, hydrophilic-lipophilic balance (HLB), and mixed phase anion exchange (MAX) were tested as extraction materials. MAX proved to be efficient for acids, but no tested material offered sufficient adsorption for aldehydes. Thus, PILS samples were extracted only with MAX to guarantee good results for organic acids determined by liquid chromatography-mass spectrometry (HPLC-MS). On-line coupling of SPE with HPLC-MS is relatively easy, and here on-line coupling of PILS with HPLC-MS through the SPE trap produced some interesting data on relevant acids in atmospheric aerosol samples. A completely different approach to aerosol sampling, namely, differential mobility analyzer (DMA)-assisted filter sampling, was employed in this study to provide information about the size dependent chemical composition of aerosols and understanding of the processes driving aerosol growth from nano-size clusters to climatically relevant particles (>40 nm). The DMA was set to sample particles with diameters of 50, 40, and 30 nm and aerosols were collected on teflon or quartz fiber filters. To clarify the gas-phase contribution, zero gas-phase samples were collected by switching off the DMA every other 15 minutes. Gas-phase compounds were adsorbed equally well on both types of filter, and were found to contribute significantly to the total compound mass. Gas-phase adsorption is especially significant during the collection of nanometer-size aerosols and needs always to be taken into account. Other aims of this study were to determine the oxidation products of β-caryophyllene (the major sesquiterpene in boreal forest) in aerosol particles. Since reference compounds are needed for verification of the accuracy of analytical measurements, three oxidation products of β-caryophyllene were synthesized: β-caryophyllene aldehyde, β-nocaryophyllene aldehyde, and β-caryophyllinic acid. All three were identified for the first time in ambient aerosol samples, at relatively high concentrations, and their contribution to the aerosol mass (and probably growth) was concluded to be significant. Methodological and instrumental developments presented in this work enable fuller understanding of the processes behind biogenic aerosol formation and provide new tools for more precise determination of biosphere-atmosphere interactions.

New computational approaches for inelastic x-ray scattering

Inelastic x-ray scattering spectroscopy is a versatile experimental technique for probing the electronic structure of materials. It provides a wealth of information on the sample's atomic-scale structure, but extracting this information from the experimental data can be challenging because there is no direct relation between the structure and the measured spectrum. Theoretical calculations can bridge this gap by explaining the structural origins of the spectral features. Reliable methods for modeling inelastic x-ray scattering require accurate electronic structure calculations. This work presents the development and implementation of new schemes for modeling the inelastic scattering of x-rays from non-periodic systems. The methods are based on density functional theory and are applicable for a wide variety of molecular materials. Applications are presented in this work for amorphous silicon monoxide and several gas phase systems. Valuable new information on their structure and properties could be extracted with the combination of experimental and computational methods.

Emerging bioenergy business at Finnish independent industrial sawmills

Finnish forest industry is in the middle of a radical change. Deepening recession and the falling demand of woodworking industry´s traditional products have forced also sawmilling industry to find new and more fertile solutions to improve their operational preconditions. In recent years, the role of bioenergy production has often been highlighted as a part of sawmills´ business repertoire. Sawmilling produces naturally a lot of by-products (e.g. bark, sawdust, chips) which could be exploited more effectively in energy production, and this would bring more incomes or maybe even create new business opportunities for sawmills. Production of bioenergy is also supported by government´s climate and energy policies favouring renewable energy sources, public financial subsidies, and soaring prices of fossil fuels. Also the decreasing production of domestic pulp and paper industry releases a fair amount of sawmills´ by-products for other uses. However, bioenergy production as a part of sawmills´ by-product utilization has been so far researched very little from a managerial point of view. The purpose of this study was to explore the relative significance of the main bioenergy-related processes, resources and factors at Finnish independent industrial sawmills including partnerships, cooperation, customers relationships and investments, and also the future perspectives of bioenergy business at these sawmills with the help of two resource-based approaches (resource-based view, natural-resource-based view). Data of the study comprised of secondary data (e.g. literature), and primary data which was attracted from interviews directed to sawmill managers (or equivalent persons in charge of decisions regarding bioenergy production at sawmill). While a literature review and the Delphi method with two questionnaires were utilized as the methods of the study. According to the results of the study, the most significant processes related to the value chain of bioenergy business are connected to raw material availability and procurement, and customer relationships management. In addition to raw material and services, the most significant resources included factory and machinery, personnel, collaboration, and geographic location. Long-term cooperation deals were clearly valued as the most significant form of collaboration, and especially in processes connected to raw material procurement. Study results also revealed that factors related to demand, subsidies and prices had highest importance in connection with sawmills´ future bioenergy business. However, majority of the respondents required that certain preconditions connected to the above-mentioned factors should be fulfilled before they will continue their bioenergy-related investments. Generally, the answers showed a wide divergence of opinions among the respondents which may refer to sawmills´ different emphases and expectations concerning bioenergy. In other words, bioenergy is still perceived as a quite novel and risky area of business at Finnish independent industrial sawmills. These results indicate that the massive expansion of bioenergy business at private sawmills in Finland is not a self-evident truth. The blocking barriers seem to be connected mainly to demand of bioenergy and money. Respondents´ answers disseminated a growing dissatisfaction towards the policies of authorities, which don´t treat equally sawmill-based bioenergy compared to other forms of bioenergy. This proposition was boiled down in a sawmill manager´s comment: “There is a lot of bioenergy available, if they just want to make use of it.” It seems that the positive effects of government´s policies favouring the renewables are not taking effect at private sawmills. However, as there anyway seems to be a lot of potential connected to emerging bioenergy business at Finnish independent industrial sawmills, there is also a clear need for more profound future studies over this topic.