Essays on the Costs and Benefits of Large Shareholders in Corporate Governance (summary section only)

“Corporate governance deals with the ways in which suppliers of finance to firms assure themselves of getting a return on their investment” (Shleifer and Vishny (1997, p. 737). According to La Porta et al. (1999), research in corporate finance relevant for most countries should focus on the incentives and capabilities of controlling shareholders to treat themselves preferentially at the expense of minority shareholders. Accordingly, this thesis sets out to answer a number of research questions regarding the role of large shareholders in public firms that have received little attention in the literature so far. A common theme in the essays stems from the costs and benefits of individual large-block owners and the role of control contestability from the perspective of outside minority shareholders. The first essay empirically examines whether there are systematic performance differences between family controlled and nonfamily controlled firms in Western Europe. In contrast to the widely held view that family control penalizes firm value, the essay shows that publicly traded family firms have higher performance than comparable firms. In the second essay, we present both theoretical and empirical analysis on the effects of control contestability on firm valuation. Consistent with the theoretical model, the empirical results show that minority shareholders benefit from a more contestable control structure. The third essay explores the effects of individual large-block owners on top management turnover and board appointments in Finnish listed firms. The results indicate that firm performance is an important determinant for management and board restructurings. For certain types of turnover decisions the corporate governance structure influences the performance / turnover sensitivity. In the fourth essay, we investigate the relation between the governance structure and dividend policy in Finnish listed firms. We find evidence in support of the outcome agency model of dividends stating that lower agency conflicts should be associated with higher dividend payouts.

Essays on Corporate Governance and the Quality of Disclosed Earnings: Across Transitional Europe

A growing body of empirical research examines the structure and effectiveness of corporate governance systems around the world. An important insight from this literature is that corporate governance mechanisms address the excessive use of managerial discretionary powers to get private benefits by expropriating the value of shareholders. One possible way of expropriation is to reduce the quality of disclosed earnings by manipulating the financial statements. This lower quality of earnings should then be reflected by the stock price of firm according to value relevance theorem. Hence, instead of testing the direct effect of corporate governance on the firm’s market value, it is important to understand the causes of the lower quality of accounting earnings. This thesis contributes to the literature by increasing knowledge about the extent of the earnings management – measured as the extent of discretionary accruals in total disclosed earnings - and its determinants across the Transitional European countries. The thesis comprises of three essays of empirical analysis of which first two utilize the data of Russian listed firms whereas the third essay uses data from 10 European economies. More specifically, the first essay adds to existing research connecting earnings management to corporate governance. It testifies the impact of the Russian corporate governance reforms of 2002 on the quality of disclosed earnings in all publicly listed firms. This essay provides empirical evidence of the fact that the desired impact of reforms is not fully substantiated in Russia without proper enforcement. Instead, firm-level factors such as long-term capital investments and compliance with International financial reporting standards (IFRS) determine the quality of the earnings. The result presented in the essay support the notion proposed by Leuz et al. (2003) that the reforms aimed to bring transparency do not correspond to desired results in economies where investor protection is lower and legal enforcement is weak. The second essay focuses on the relationship between the internal-control mechanism such as the types and levels of ownership and the quality of disclosed earnings in Russia. The empirical analysis shows that the controlling shareholders in Russia use their powers to manipulate the reported performance in order to get private benefits of control. Comparatively, firms owned by the State have significantly better quality of disclosed earnings than other controllers such as oligarchs and foreign corporations. Interestingly, market performance of firms controlled by either State or oligarchs is better than widely held firms. The third essay provides useful evidence on the fact that both ownership structures and economic characteristics are important factors in determining the quality of disclosed earnings in three groups of countries in Europe. Evidence suggests that ownership structure is a more important determinant in developed and transparent countries, while economic determinants are important determinants in developing and transitional countries.

Knowledge Transfer within Western Multinationals' Subsidiary Units in China and Finland - The Impact of Headquarter Control Mechanisms, Subsidiary Location and Social Capital (summary section only)

It is suggested that the ability and practices of how the multinational corporation (MNC) manages knowledge transfer among its geographically dispersed subsidiary units are crucial for the building and development of firm competitive advantage. However, cross-border transfer of valuable organizational knowledge is likely to be problematic and laborious, especially within diversified and differentiated MNCs. Using data collected from 164 western multinational companies’ subsidiary units located in China and Finland, this study aims to investigate cross-border knowledge transfer within the MNC. It explores a number of factors that influence the transfer of knowledge among units in the differentiated MNC. The study consists of five individual papers. Paper 1 investigates a range of organizational mechanisms that may positively influence a subsidiary’s propensity to undertake knowledge transfers to other parts of the corporation. Paper 2 explores the impact of subsidiary location on the motivational dispositions of knowledge receiving units to value and accept knowledge from subsidiaries located in economically less advanced countries. Paper 3 examines the influence of social capital variables on knowledge transfer in dyadic relationships between foreign-owned subsidiaries and their sister and patent units. Paper 4 provides some initial insights into potentially different effects of trust and shared vision in intra-organizational vs. inter-organizational relationships. Using a case study setting, Paper 5 explores means and mechanisms used in transferring human resource management practices to Western MNCs’ business units in China from a cultural perspective. The results of the study show that MNC management through choices regarding organizational controls can encourage and enhance corporate-internal knowledge transfer. It also finds evidence that more knowledge is transferred from subsidiaries located in an industrialized country (e.g., Finland) than subsidiaries located in a developing country (e.g., China). While the study has highlighted the importance of social capital in promoting knowledge transfer, it has also uncovered some new findings that the effect of trust and shared vision may be contingent upon different contexts. Finally, in Paper 5, a number of mechanisms used in transferring selected HRM practices and competences to the Chinese business units have been identified. The findings suggest that cultural differences should be taken into consideration in the choice and use of different transfer mechanisms.

Geochemistry and petrology of the ferropicrite dikes and associated rocks of Vestfjella, western Dronning Maud Land, Antarctica

This study provides insights into the composition and origin of ferropicrite dikes (FeOtot = 13 17 wt. %; MgO = 13 19 wt. %) and associated meimechite, picrite, picrobasalt, and basalt dikes found at Vestfjella, western Dronning Maud Land, Antarctica. The dikes crosscut Jurassic Karoo continental flood basalts (CFB) that were emplaced during the early stages of the breakup of the Gondwana supercontinent ~180 Ma ago. Selected samples (31 overall from at least eleven dikes) were analyzed for their mineral chemical, major element, trace element, and Sr, Nd, Pb, and Os isotopic compositions. The studied samples can be divided into two geochemically distinct types: (1) The depleted type (24 samples from at least nine dikes) is relatively depleted in the most incompatible elements and exhibits isotopic characteristics (e.g., initial εNd of +4.8 to +8.3 and initial 187Os/188Os of 0.1256 0.1277 at 180 Ma) similar to those of mid-ocean ridge basalts (MORB); (2) The enriched type (7 samples from at least two dikes) exhibits relatively enriched incompatible element and isotopic characteristics (e.g., initial εNd of +1.8 to +3.6 and initial 187Os/188Os of 0.1401 0.1425 at 180 Ma) similar to those of oceanic island basalts. Both magma types have escaped significant contamination by the continental crust. The depleted type is related to the main phase of Karoo magmatism and originated as highly magnesian (MgO up to 25 wt. %) partial melts at high temperatures (mantle potential temperature >1600 °C) and pressures (~5 6 GPa) from a sublithospheric, water-bearing, depleted peridotite mantle source. The enriched type sampled pyroxene-bearing heterogeneities that can be traced down to either recycled oceanic crust or melt-metasomatized portions of the sublithospheric or lithospheric mantle. The source of the depleted type represents a sublithospheric end-member source for many Karoo lavas and has subsequently been sampled by the MORBs of the Indian Ocean. These observations, together with the purported high temperatures, indicate that the Karoo CFBs were formed in an extensive melting episode caused mainly by internal heating of the upper mantle beneath the Gondwana supercontinent. My research supports the view that ferropicritic melts can be generated in several ways: the relative Fe-enrichment of mantle partial melts is most readily achieved by (1) relatively low degree of partial melting, (2) high pressure of partial melting, and (3) melting of enriched source components (e.g., pyroxenite and metasomatized peridotite). Ferropicritic whole-rock compositions could also result from accumulation, secondary alteration, and fractional crystallization, however, and caution is required when addressing the parental magma composition.

Nota sullo status della gallina prataiola (Tetrax tetrax) nella Zona di Protezione Speciale Piana di Semestene, Bonorva, Macomer e Bortigali (Sardegna), 2007-2009

The little bustard Tetrax tetrax is a bird of agro-pastoral landscapes rapidly disappearing from most of Western Europe due to agricultural intensification. In Italy, the species is virtually extinct from the mainland but still occurs in Sardinia, where four Special Protection Areas (SPAs) have been designated in 2007 to protect the bustard and related habitat. In this note, we document a steep decline (between 50 and 87,5%) of the species during the last decade in one of those four SPAs, Plains of Semestene, Bonorva, Macomer and Bortigali. However, during summer 2009, a group of 17 individuals was found within the SPA, confirming that the species, although at low numbers (5-15 displaying males), still breeds successfully in the area. Potential limiting factors are also discussed. We urge to undertake conservation measures based on solid scientific evidence if the local population is to be saved from probable extinction in the near future.

Public opinion on useful languages in Europe

This article analyses the results of five Eurobarometer surveys (of 1995, 1997, 1998, 2000 and 2005) designed to measure which languages Europeans consider most useful to know. Most Europeans are of the opinion that English is the most useful, followed by French and German. During the last decade the popularity of French and German as useful languages has been decreasing significantly, while English has remained universally favoured as the most useful language. French and German have lost their popularity especially among those who do not speak them as a foreign language. On the other hand, Spanish, Russian and other languages (often these include languages of neighbouring countries, minority languages or a second official language of the country in question) have kept and even increased their former level of popularity. Opinions about useful languages vary according to a respondent’s knowledge of languages, education and profession. This article analyses these differences and discusses their impact on the study of foreign languages and the future of the practice of foreign languages in Europe.

Population genetics of the invasive plant species Impatiens glandulifera in Southern Finland

Biological invasions affect biodiversity worldwide, and, consequently, the invaded ecosystems may suffer from significant losses in economic and cultural values. Impatiens glandulifera Royle (Balsaminaceae) is an invasive annual herb, native to the western Himalayas and introduced into Europe in the 19th century as a garden ornamental plant. The massive invasion of I. glandulifera is due to its high reproductive output, rapid growth and its ability to outcompete native species. In Finland, the first observations regarding the presence of I. glandulifera date from the year 1947, and today it is considered a serious problem in riparian habitats. The aim of this master’s thesis research is to reveal the population genetic structure of I. glandulifera in Finland and to find out whether there have been one or multiple invasions in Finland. The study focuses on investigating the origin of I. glandulifera in Southern Finland, by comparing plant samples from the Helsinki region with those from its native region and other regions of invasion. Samples from four populations in Helsinki and from the United Kingdom, Canada, India and Pakistan were collected and genotyped using 11 microsatellite markers. The genetic analyses were evaluated using the programs Arlequin and Structure. The results of the genetic analyses suggested that I. glandulifera has been introduced to Finland more than once. Multiple introductions are supported by the higher level of genetic diversity detected within and among Finnish populations than would be expected for a single introduction. Results of the Bayesian Structure analysis divided the four Finnish populations into four clusters. This geographical structure was further supported by pairwise Fst values among populations. The causes and potential consequences of such multiple introductions of I. glandulifera in Finland and further perspectives are discussed.

Patents, Ethics and Stem Cell Research : The Case of hESC Innovation in Australia, Europe and the United States

Embryonic stem cells offer potentially a ground-breaking insight into health and diseases and are said to offer hope in discovering cures for many ailments unimaginable few years ago. Human embryonic stem cells are undifferentiated, immature cells that possess an amazing ability to develop into almost any body cell such as heart muscle, bone, nerve and blood cells and possibly even organs in due course. This remarkable feature, enabling embryonic stem cells to proliferate indefinitely in vitro (in a test tube), has branded them as a so-called miracle cure . Their potential use in clinical applications provides hope to many sufferers of debilitating and fatal medical conditions. However, the emergence of stem cell research has resulted in intense debates about its promises and dangers. On the one hand, advocates hail its potential, ranging from alleviating and even curing fatal and debilitating diseases such as Parkinson s, diabetes, heart ailments and so forth. On the other hand, opponents decry its dangers, drawing attention to the inherent risks of human embryo destruction, cloning for research purposes and reproductive cloning eventually. Lately, however, the policy battles surrounding human embryonic stem cell innovation have shifted from being a controversial research to scuffles within intellectual property rights. In fact, the ability to obtain patents represents a pivotal factor in the economic success or failure of this new biotechnology. Although, stem cell patents tend to more or less satisfy the standard patentability requirements, they also raise serious ethical and moral questions about the meaning of the exclusions on ethical or moral grounds as found in European and to an extent American and Australian patent laws. At present there is a sort of a calamity over human embryonic stem cell patents in Europe and to an extent in Australia and the United States. This in turn has created a sense of urgency to engage all relevant parties in the discourse on how best to approach patenting of this new form of scientific innovation. In essence, this should become a highly favoured patenting priority. To the contrary, stem cell innovation and its reliance on patent protection risk turmoil, uncertainty, confusion and even a halt on not only stem cell research but also further emerging biotechnology research and development. The patent system is premised upon the fundamental principle of balance which ought to ensure that the temporary monopoly awarded to the inventor equals that of the social benefit provided by the disclosure of the invention. Ensuring and maintaining this balance within the patent system when patenting human embryonic stem cells is of crucial contemporary relevance. Yet, the patenting of human embryonic stem cells raises some fundamental moral, social and legal questions. Overall, the present approach of patenting human embryonic stem cell related inventions is unsatisfactory and ineffective. This draws attention to a specific question which provides for a conceptual framework for this work. That question is the following: how can the investigated patent offices successfully deal with patentability of human embryonic stem cells? This in turn points at the thorny issue of application of the morality clause in this field. In particular, the interpretation of the exclusions on ethical or moral grounds as found in Australian, American and European legislative and judicial precedents. The Thesis seeks to compare laws and legal practices surrounding patentability of human embryonic stem cells in Australia and the United States with that of Europe. By using Europe as the primary case study for lessons and guidance, the central goal of the Thesis then becomes the determination of the type of solutions available to Europe with prospects to apply such to Australia and the United States. The Dissertation purports to define the ethical implications that arise with patenting human embryonic stem cells and intends to offer resolutions to the key ethical dilemmas surrounding patentability of human embryonic stem cells and other morally controversial biotechnology inventions. In particular, the Thesis goal is to propose a functional framework that may be used as a benchmark for an informed discussion on the solution to resolving ethical and legal tensions that come with patentability of human embryonic stem cells in Australian, American and European patent worlds. Key research questions that arise from these objectives and which continuously thread throughout the monograph are: 1. How do common law countries such as Australia and the United States approach and deal with patentability of human embryonic stem cells in their jurisdictions? These practices are then compared to the situation in Europe as represented by the United Kingdom (first two chapters), the Court of Justice of the European Union and the European Patent Office decisions (Chapter 3 onwards) in order to obtain a full picture of the present patenting procedures on the European soil. 2. How are ethical and moral considerations taken into account at patent offices investigated when assessing patentability of human embryonic stem cell related inventions? In order to assess this part, the Thesis evaluates how ethical issues that arise with patent applications are dealt with by: a) Legislative history of the modern patent system from its inception in 15th Century England to present day patent laws. b) Australian, American and European patent offices presently and in the past, including other relevant legal precedents on the subject matter. c) Normative ethical theories. d) The notion of human dignity used as the lowest common denominator for the interpretation of the European morality clause. 3. Given the existence of the morality clause in form of Article 6(1) of the Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions which corresponds to Article 53(a) European Patent Convention, a special emphasis is put on Europe as a guiding principle for Australia and the United States. Any room for improvement of the European morality clause and Europe s current manner of evaluating ethical tensions surrounding human embryonic stem cell inventions is examined. 4. A summary of options (as represented by Australia, the United States and Europe) available as a basis for the optimal examination procedure of human embryonic stem cell inventions is depicted, whereas the best of such alternatives is deduced in order to create a benchmark framework. This framework is then utilised on and promoted as a tool to assist Europe (as represented by the European Patent Office) in examining human embryonic stem cell patent applications. This method suggests a possibility of implementing an institution solution. 5. Ultimately, a question of whether such reformed European patent system can be used as a founding stone for a potential patent reform in Australia and the United States when examining human embryonic stem cells or other morally controversial inventions is surveyed. The author wishes to emphasise that the guiding thought while carrying out this work is to convey the significance of identifying, analysing and clarifying the ethical tensions surrounding patenting human embryonic stem cells and ultimately present a solution that adequately assesses patentability of human embryonic stem cell inventions and related biotechnologies. In answering the key questions above, the Thesis strives to contribute to the broader stem cell debate about how and to which extent ethical and social positions should be integrated into the patenting procedure in pluralistic and morally divided democracies of Europe and subsequently Australia and the United States.

Microsite occupancy and spatial structure of regeneration in three late-successional Norway spruce forests in northern Europe

A comparison of microsite occupancy and the spatial structure of regeneration in three areas of late-successional Norway spruce dominated forest. Pallas-Ylläs is understood to have been influenced only by small-scale disturbance; Dvina-Pinega has had sporadic larger-scale disturbances; Kazkim has been affected by fire. All spruce and birch trees with diameter at breast height (DBH) ?10 cm were mapped in five stands on 40 m x 400 m transects, and those with DBH < 10 cm on 2 or 4 m x 400 m subplots. Microsite type was inventoried at 1m intervals along the centre line and for each tree with DBH < 10 cm. At all study areas small seedlings (h < 0.3 m, DBH < 10 cm) preferentially occupied disturbed microsites. In contrast, spruce saplings (h ? 1.3 m, DBH <10 cm) at all study areas showed less, or no, preference. At Pallas-Ylläs spruce seedlings (h < 1.3 m, DBH < 10 cm) and saplings (h ? 1.3 m, DBH < 10 cm) exhibited spatial correlation at scales from 32-52 m. At Dvina-Pinega saplings of both spruce and birch exhibited spatial correlation at scales from 32-81 m. At Kazkim spatial correlation of seedlings and saplings of both species was exhibited over variable distances. No spatial cross-correlation was found between overstorey basal area (DBH ? 10 cm) and regeneration (h ? 1.3 m, DBH < 10 cm) at any study area. The results confirm the importance of disturbed microsites for seedling establishment, but suggest that undisturbed microsites may sometimes be more advantageous for long-term tree survival. The regeneration gap concept may not be useful in describing the regeneration dynamics of late-successional boreal forests.

Thunderstorm climatology and lightning location applications in northern Europe

Thunderstorm is a dangerous electrical phenomena in the atmosphere. Thundercloud is formed when thermal energy is transported rapidly upwards in convective updraughts. Electrification occurs in the collisions of cloud particles in the strong updraught. When the amount of charge in the cloud is large enough, electrical breakdown, better known as a flash, occurs. Lightning location is nowadays an essential tool for the detection of severe weather. Located flashes indicate in real time the movement of hazardous areas and the intensity of lightning activity. Also, an estimate for the flash peak current can be determined. The observations can be used in damage surveys. The most simple way to represent lightning data is to plot the locations on a map, but the data can be processed in more complex end-products and exploited in data fusion. Lightning data serves as an important tool also in the research of lightning-related phenomena, such as Transient Luminous Events. Most of the global thunderstorms occur in areas with plenty of heat, moisture and tropospheric instability, for example in the tropical land areas. In higher latitudes like in Finland, the thunderstorm season is practically restricted to the summer season. Particular feature of the high-latitude climatology is the large annual variation, which regards also thunderstorms. Knowing the performance of any measuring device is important because it affects the accuracy of the end-products. In lightning location systems, the detection efficiency means the ratio between located and actually occurred flashes. Because in practice it is impossible to know the true number of actually occurred flashes, the detection efficiency has to be esimated with theoretical methods.