Does Uncertainty Affect Investment and Labor Demand?

This paper analyzes the effect of uncertainty on investment and labor demand for Finnish firms during the time period 1987 – 2000. Utilizing a stock return based measure of uncertainty decomposed into systematic and idiosyncratic components, the results reveal that idiosyncratic uncertainty significantly reduces both investment and labor demand. Idiosyncratic uncertainty seems to influence investment in the current period, whereas the depressing effect on labor demand appears with a one-year lag. The results provide support that the depressing effect of idiosyncratic uncertainty on investment is stronger for small firms in comparison to large firms. Some evidence is reported regarding differential effects of uncertainty on labor demand conditional on firm characteristics. Most importantly, the depressing effect of lagged idiosyncratic uncertainty on labor demand tends to be stronger for diversified firms compared with focused firms.

CSR in forest industry – Case study of reporting and implementation of social responsibility in three international companies

Corporate Social Responsibility (CSR) has become increasingly important topic in forest industries, and other global companies, in recent years. Globalisation, faster information delivery and demand for sustainable development have set new challenges for global companies in their business operations. Also the importance of stakeholder relations, and pressure to become more transparent has increased in the forest industries. Three dimensions of corporate responsibility economic, environmental and social, are often included in the concept of CSR. Global companies mostly claim that these dimensions are equally important. This study analyses CSR in forest industry and has focus on reporting and implementation of social responsibility in three international companies. These case-companies are Stora Enso, SCA and Sappi, and they have different geographical base, product portfolios and therefore present interesting differences about forest industry strategy and CSR. Global Reporting Initiative (GRI) has created the most known and used reporting framework in CSR reporting. GRI Guidelines have made CSR reporting a uniform function, which can also be measured between companies and different sectors. GRI Guidelines have also made it possible to record and control CSR data in the companies. In recent years the use of GRI Guidelines has increased substantially. Typically CSR reporting on economic and environmental responsibility have been systematic in the global companies and often driven by legistlation and other regulations. However the social responsibility has been less regulated and more difficult to compare. Therefore it has previously been often less focused in the CSR reporting of the global companies. The implementation and use of GRI Guidelines have also increased dialogue on social responsibility issues and stakeholder management in global companies. This study analyses the use of GRI´s framework in the forest industry companies´ CSR reporting. This is a qualitative study and the disclosure of data is empricially analysed using content analysis. Content analysis has been selected as a method for this study because it makes it possible to use different sources of information. The data of this study consists of existing academic literature of CSR, sustainability reports of thecase-companies during 2005-2009, and the semi-structured interviews with company representatives. Different sources provide the possibility to look at specific subject from more than one viewpoint. The results of the study show that all case-companies have relatively common themes in their CSR disclosure, and the differences rise mainly from their product-portfolios, and geographic base. Social impacts to local communities, in the CSR of the companies, were mainly dominated by issues concerning creating wealth to the society and impacting communities through creation of work. The comparability of the CSR reporting, and especially social indicators increased significally from 2007 onwards in all case-companies. Even though the companies claim that three dimensions of CSR economic, environmental and social are equally important economic issues and profit improvement still seem to drive most of the operations in the global companies. Many issues that are covered by laws and regulations are still essentially presented as social responsibility in CSR. However often the unwelcome issues in companies like closing operations are covered just briefly, and without adequate explanation. To make social responsibility equally important in the CSR it would demand more emphasis from all the case-companies. A lot of emphasis should be put especially on the detail and extensiveness of the social reponsibility content in the CSR.

A modell of socially optimal hydro reservoir usage - yelding socially optimal outcomes in nordic electricity markets

An extensive electricity transmission network facilitates electricity trading between Finland, Sweden, Norway and Denmark. Currently most of the area's power generation is traded at NordPool, where the trading volumes have steadily increased since the early 1990's, when the exchange was founded. The Nordic electricity is expected to follow the current trend and further integrate with the other European electricity markets. Hydro power is the source for roughly a half of the supply in the Nordic electricity market and most of the hydro is generated in Norway. The dominating role of hydro power distinguishes the Nordic electricity market from most of the other market places. Production of hydro power varies mainly due to hydro reservoirs and demand for electricity. Hydro reservoirs are affected by water inflows that differ each year. The hydro reservoirs explain remarkably the behaviour of the Nordic electricity markets. Therefore among others, Kauppi and Liski (2008) have developed a model that analyzes the behaviour of the markets using hydro reservoirs as explanatory factors. Their model includes, for example, welfare loss due to socially suboptimal hydro reservoir usage, socially optimal electricity price, hydro reservoir storage and thermal reservoir storage; that are referred as outcomes. However, the model does not explain the real market condition but rather an ideal situation. In the model the market is controlled by one agent, i.e. one agent controls all the power generation reserves; it is referred to as a socially optimal strategy. Article by Kauppi and Liski (2008) includes an assumption where an individual agent has a certain fraction of market power, e.g. 20 % or 30 %. In order to maintain the focus of this thesis, this part of their paper is omitted. The goal of this thesis is two-fold. Firstly we expand the results from the socially optimal strategy for years 2006-08, as the earlier study finishes in 2005. The second objective is to improve on the methods from the previous study. This thesis results several outcomes (SPOT-price and welfare loss, etc.) due to socially optimal actions. Welfare loss is interesting as it describes the inefficiency of the market. SPOT-price is an important output for the market participants as it often has an effect on end users' electricity bills. Another function is to modify and try to improve the model by means of using more accurate input data, e.g. by considering pollution trade rights effect on input data. After modifications to the model, new welfare losses are calculated and compared with the same results before the modifications. The hydro reservoir has the higher explanatory significance in the model followed by thermal power. In Nordic markets, thermal power reserves are mostly nuclear power and other thermal sources (coal, natural gas, oil, peat). It can be argued that hydro and thermal reservoirs determine electricity supply. Roughly speaking, the model takes into account electricity demand and supply, and several parameters related to them (water inflow, oil price, etc.), yielding finally the socially optimal outcomes. The author of this thesis is not aware of any similar model being tested before. There have been some other studies that are close to the Kauppi and Liski (2008) model, but those have a somewhat different focus. For example, a specific feature in the model is the focus on long-run capacity usage that differs from the previous studies on short-run market power. The closest study to the model is from California's wholesale electricity markets that, however, uses different methodology. Work is constructed as follows.

Bioremediation of diesel oil contaminated soil and water

Diesel spills contaminate aquatic and terrestrial environments. To prevent the environmental and health risks, the remediation needs to be advanced. Bioremediation, i.e., degradation by microbes, is one of the suitable methods for cleaning diesel contamination. In monitored natural attenuation technique are natural processes in situ combined, including bioremediation, volatilization, sorption, dilution and dispersion. Soil bacteria are capable of adapting to degrade environmental pollutants, but in addition, some soil types may have indigenous bacteria that are naturally suitable for degradation. The objectives for this work were (1) to find a feasible and economical technique to remediate oil spilled into Baltic Sea water and (2) to bioremediate soil contaminated by diesel oil. Moreover, the aim was (3) to study the potential for natural attenuation and the indigenous bacteria in soil, and possible adaptation to degrade diesel hydrocarbons. In the aquatic environment, the study concentrated on diesel oil sorption to cotton grass fiber, a natural by-product of peat harvesting. The impact of diesel pollution was followed in bacteria, phytoplankton and mussels. In a terrestrial environment, the focus was to compare the methods of enhanced biodegradation (biostimulation and bioaugmentation), and to study natural attenuation of oil hydrocarbons in different soil types and the effect that a history of previous contamination may have on the bioremediation potential. (1) In the aquatic environment, rapid removal of diesel oil was significant for survival of tested species and thereby diversity maintained. Cotton grass not only absorbed the diesel but also benefited the bacterial growth by providing a large colonizable surface area and hence oil-microbe contact area. Therefore use of this method would enhance bioremediation of diesel spills. (2) Biostimulation enhances bioremediation, and (3) indigenous diesel-degrading bacteria are present in boreal environments, so microbial inocula are not always needed. In the terrestrial environment experiments, the combination of aeration and addition of slowly released nitrogen advanced the oil hydrocarbon degradation. Previous contamination of soil gives the bacterial community the potential for rapid adaptation and efficient degradation of the same type of contaminant. When the freshly contaminated site needs addition of diesel degraders, previously contaminated and remediated soil could be used as a bacterial inoculum. Another choice of inoculum could be conifer forest soil, which provides a plentiful population of degraders, and based on the present results, could be considered as a safe non-polluted inoculum. According to the findings in this thesis, bioremediation (microbial degradation) and monitored natural attenuation (microbial, physical and chemical degradation) are both suitable techniques for remediation of diesel-contaminated sites in Finland.

Categorical Meteorological Products: Evaluation and Analysis

In meteorology, observations and forecasts of a wide range of phenomena for example, snow, clouds, hail, fog, and tornados can be categorical, that is, they can only have discrete values (e.g., "snow" and "no snow"). Concentrating on satellite-based snow and cloud analyses, this thesis explores methods that have been developed for evaluation of categorical products and analyses. Different algorithms for satellite products generate different results; sometimes the differences are subtle, sometimes all too visible. In addition to differences between algorithms, the satellite products are influenced by physical processes and conditions, such as diurnal and seasonal variation in solar radiation, topography, and land use. The analysis of satellite-based snow cover analyses from NOAA, NASA, and EUMETSAT, and snow analyses for numerical weather prediction models from FMI and ECMWF was complicated by the fact that we did not have the true knowledge of snow extent, and we were forced simply to measure the agreement between different products. The Sammon mapping, a multidimensional scaling method, was then used to visualize the differences between different products. The trustworthiness of the results for cloud analyses [EUMETSAT Meteorological Products Extraction Facility cloud mask (MPEF), together with the Nowcasting Satellite Application Facility (SAFNWC) cloud masks provided by Météo-France (SAFNWC/MSG) and the Swedish Meteorological and Hydrological Institute (SAFNWC/PPS)] compared with ceilometers of the Helsinki Testbed was estimated by constructing confidence intervals (CIs). Bootstrapping, a statistical resampling method, was used to construct CIs, especially in the presence of spatial and temporal correlation. The reference data for validation are constantly in short supply. In general, the needs of a particular project drive the requirements for evaluation, for example, for the accuracy and the timeliness of the particular data and methods. In this vein, we discuss tentatively how data provided by general public, e.g., photos shared on the Internet photo-sharing service Flickr, can be used as a new source for validation. Results show that they are of reasonable quality and their use for case studies can be warmly recommended. Last, the use of cluster analysis on meteorological in-situ measurements was explored. The Autoclass algorithm was used to construct compact representations of synoptic conditions of fog at Finnish airports.

Desorptio/fotoionisaatio ilmanpaineessa takavarikoitujen huumausaineiden, steroidien ja räjähdysaineiden tutkimuksessa

Tutkimuksen tarkoituksena oli selvittää desorptio/fotoionisaatio ilmanpaineessa tekniikan (engl. desorption atmospheric pressure photoionization, DAPPI) soveltuvuutta rikosteknisen laboratorion näytteiden analysointiin. DAPPI on nopea massaspektrometrinen ionisaatiotekniikka, jolla voidaan tutkia yhdisteitä suoraan erilaisilta pinnoilta. DAPPI:ssa käytetään lämmitettyä mikrosirua, joka suihkuttaa höyrystynyttä liuotin- ja kaasuvirtausta kohti näytettä. Näytteen pinnan komponentit desorboituvat lämmön vaikutuksesta, jonka jälkeen ionisoituminen tapahtuu VUV-lampun emittoimien fotonien avulla.DAPPI:lla tutkittiin takavarikoituja huumausaineita, anabolisia steroideja ja räjähdysaineita sekä niiden jäämiä erilaisilta pinnoilta. Lisäksi kartoitettiin DAPPI:n mahdollisuuksia ja rajoituksia erilaisille näytematriiseille ilman näytteiden esikäsittelyä. Takavarikoitujen huumausaineiden tutkimuksessa analysoitiin erilaisia tabletteja, jauheita, kasvirouheita, huumekasveja (khat, oopium, kannabis) ja sieniä. Anabolisia steroideja tunnistettiin tableteista sekä ampulleista, jotka sisälsivät öljymäistä nestettä. Jauheet ripoteltiin kaksipuoliselle teipille ja analysoitiin siltä. Muut näytteet analysoitiin sellaisenaan ilman minkäänlaista esikäsittelyä, paitsi nestemäisten näytteiden kohdalla näyte pipetoitiin talouspaperille, joka analysoitiin DAPPI:lla. DAPPI osoittautui nopeaksi ja yksinkertaiseksi menetelmäksi takavarikoitujen huumausaineiden ja steroidien analysoimisessa. Se soveltui hyvin rikoslaboratorion erityyppisten näytteiden rutiiniseulontaan ja helpotti erityisesti huumekasvien ja öljymäisten steroidiliuosten tutkimusta. Massaspektrometrin likaantuminen pystyttiin ehkäisemään säätämällä näytteen etäisyyttä sen suuaukosta. Likaantumista ei havaittu huolimatta näytteiden korkeista konsentraatioista ja useita kuukausia jatkuneista mittauksista. Räjähdysaineiden tutkimuksessa keskityttiin seitsemän eri räjähdysaineen DAPPI-MS-menetelmän kehitykseen; trinitrotolueeni (TNT), nitroglykoli (NK), nitroglyseriini (NG), pentriitti (PETN), heksogeeni (RDX), oktogeeni (HMX) ja pikriinihappoä Nämä orgaaniset räjähteet ovat nitraattiyhdisteitä, jotka voidaan jakaa rakenteen puolesta nitroamiineihin (RDX ja HMX), nitroaromaatteihin (TNT ja pikriinihappo) sekä nitraattiestereihin (PETN, NG ja NK). Menetelmäkehityksessä räjähdysainelaimennokset pipetoitiin polymetyylimetakrylaatin (PMMA) päälle ja analysoitiin siitä. DAPPI:lla tutkittiin myäs autenttisia räjähdysainejäämiä erilaisista matriiseista. DAPPI:lla optimoitiin jokaiselle räjähdysaineelle sopiva menetelmä ja yhdisteet saatiin näkymään puhdasaineina. Räjähdysainejäämien analysoiminen erilaisista rikospaikkamateriaaleista osoittautui haastavammaksi tehtäväksi, koska matriisit aiheuttivat itsessään korkean taustan spektriin, josta räjähdysaineiden piikit eivät useimmiten erottuneet tarpeeksi. Muut desorptioionisaatiotekniikat saattavat soveltua paremmin haastavien räjähdysainejäämien havaitsemiseksi.

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.

Essays on labour demand and wage formation

The first essay in this thesis is on gender wage differentials among manufacturing sector white-collar workers. The wage differential is decomposed into firm, job (within-firm) and individ-ual-level components. Job-level gender segregation explains over half of the gap, while firm-level segregation is not important. After controlling for firm, job and individual characteristics, the remaining unexplained wage cap to the advantage of men is six per cent of men s mean wage. In the second essay, I study how the business cycle and gender affect the distribution of the earnings losses of displaced workers. The negative effect of displacement is large, persistent and strongest in the lowest earnings deciles. The effect is larger in a recession than in a recov-ery period, and in all periods women s earnings drop more than men s earnings. The third essay shows that the transition from steady employment to disability pension de-pends on the stringency of medical screening and the degree of experience-rating of pension costs applied to the employer. The fact that firms have to bear part of the cost of employees disability pension costs lowers both the incidence of long sick leave periods and the probabil-ity that sick leave ends in a disability pension. The fourth and fifth essays are studies on the employment, wage and profit effects of a re-gional payroll tax cut experiment conducted in northern and eastern Finland. The results show no statistically significant effect on any of the response variables.

Integrated climatic impacts of forestry and fibre-based packaging

The purpose of this study was to examine the integrated climatic impacts of forestry and the use fibre-based packaging materials. The responsible use of forest resources plays an integral role in mitigating climate change. Forests offer three generic mitigation strategies; conservation, sequestration and substitution. By conserving carbon reservoirs, increasing the carbon sequestration in the forest or substituting fossil fuel intensive materials and energy, it is possible to lower the amount of carbon in the atmosphere through the use of forest resources. The Finnish forest industry consumed some 78 million m3 of wood in 2009, while total of 2.4 million tons of different packaging materials were consumed that same year in Finland. Nearly half of the domestically consumed packaging materials were wood-based. Globally the world packaging material market is valued worth annually some €400 billion, of which the fibre-based packaging materials account for 40 %. The methodology and the theoretical framework of this study are based on a stand-level, steady-state analysis of forestry and wood yields. The forest stand data used for this study were obtained from Metla, and consisted of 14 forest stands located in Southern and Central Finland. The forest growth and wood yields were first optimized with the help of Stand Management Assistant software, and then simulated in Motti for forest carbon pools. The basic idea was to examine the climatic impacts of fibre-based packaging material production and consumption through different forest management and end-use scenarios. Economically optimal forest management practices were chosen as the baseline (1) for the study. In the alternative scenarios, the amount of fibre-based packaging material on the market decreased from the baseline. The reduced pulpwood demand (RPD) scenario (2) follows economically optimal management practices under reduced pulpwood price conditions, while the sawlog scenario (3) also changed the product mix from packaging to sawnwood products. The energy scenario (4) examines the impacts of pulpwood demand shift from packaging to energy use. The final scenario follows the silvicultural guidelines developed by the Forestry Development Centre Tapio (5). The baseline forest and forest product carbon pools and the avoided emissions from wood use were compared to those under alternative forest management regimes and end-use scenarios. The comparison of the climatic impacts between scenarios gave an insight into the sustainability of fibre-based packaging materials, and the impacts of decreased material supply and substitution. The results show that the use of wood for fibre-based packaging purposes is favorable, when considering climate change mitigation aspects of forestry and wood use. Fibre-based packaging materials efficiently displace fossil carbon emissions by substituting more energy intensive materials, and they delay biogenic carbon re-emissions to the atmosphere for several months up to years. The RPD and the sawlog scenarios both fared well in the scenario comparison. These scenarios produced relatively more sawnwood, which can displace high amounts of emissions and has high carbon storing potential due to the long lifecycle. The results indicate the possibility that win-win scenarios exist by shifting production from pulpwood to sawlogs; on some of the stands in the RPD and sawlog scenarios, both carbon pools and avoided emissions increased from the baseline simultaneously. On the opposite, the shift from packaging material to energy use caused the carbon pools and the avoided emissions to diminish from the baseline. Hence the use of virgin fibres for energy purposes, rather than forest industry feedstock biomass, should be critically judged if optional to each other. Managing the stands according to the silvicultural guidelines developed by the Forestry Development Centre Tapio provided the least climatic benefits, showing considerably lower carbon pools and avoided emissions. This seems interesting and worth noting, as the guidelines are the current basis for the forest management practices in Finland.