What Determines Stock Option Contract Design?

This paper analyzes factors driving the design of stock option plans for Finnish firms. We examine determinants of the scope of plans, exercise price, target group, and dividend protection. The scope is found to be negatively related to Tobin’s Q and positively related to proxies for monitoring costs. The scope is also greater in broad-based plans, and in plans with dividend protection. Prior stock return is found to be negatively related to the size of the premium (out-of-the-moneyness), whereas dividend protection increases the premium. The results also suggest that investment intensity, cash flow, and monitoring costs are associated with the likelihood of granting premium (out-of-the-money) stock options. Furthermore, the likelihood of granting broad-based plans is increasing in institutional ownership and cash flow constraints, and decreasing in firm size. Broad-based plans are also more likely among firms in growth industries. We find support that the likelihood of dividend protection is decreasing in foreign ownership. In addition, firms paying zero-dividends are less likely to include dividend protection, whereas higher unsystematic risk is associated with a greater likelihood of including dividend protection.

Corporate Governance Mechanisms and Firm Performance:Evidence from Finland

This paper examines the association between corporate governance attributes and firm performance of Finnish firms during 1990 – 2000. The empirical results suggest that corporate governance matters for firm performance. First, univariate test results indicate that firms characterized by a high (efficient) level of corporate governance have delivered greater stock returns, are higher valued based on the measure of Tobin’s Q, and exhibit higher ratios of cash flow to assets, on average, in comparison to their counterparts characterized by a low (inefficient) level of corporate governance. Second, controlling for a number of well-known determinants of stock returns, we find evidence that firms categorized by inefficient corporate governance have delivered inferior returns to shareholders during the investigation period. Finally, after controlling for several common determinants of firm value, we find that firms characterized by efficient corporate governance have been valued higher during the investigation period, measured by Tobin’s Q.

Mikä yliopisto-opiskelijaa kiihdyttää? : Opiskeluympäristöjen tutkimusta CASS-kokemusotantamenetelmällä flow-teoriaa ja ydintunneteorioita soveltaen

Flow experience is often defined either as an experience of high concentration and enjoyment or as a situation, where high challenges are matched with high skills. According to core-emotion theories, the experience of any emotion contains two core emotions: valence and arousal. Through an accurate mathematical model, the present study investigated, whether the experience of concentration and enjoyment is related to situations where both challenge and skills are high and in balance. Further, it was investigated what sort of core emotions are related to differing relationships between challenge and skills. Finally, university students’ experiences of their natural study environments were described in terms of core emotions and in terms of relationships between challenge and skills. Participants were 55 university students who participated two weeks research period. Altogether 3367 questionnaire answers were collected with the CASS experience-sampling method, operating in 3G-mobile phones. The relationship between challenge and skills (competence) was defined in an exact way in polar coordinates. An enjoyable and concentrated flow experience was defined as a sum variable of absorption, interest and enthusiasm. Core emotions were calculated with factor analysis from nine emotion variables. As expected, an experience of concentration and enjoyment was, on average, related to the situations where both challenge and skills were high and in balance. This was not, however, the case in every situation. Thus, it should be taken into consideration how flow experience is operationalised in experience sampling studies. When flow experience was defined as a situation of high challenge and high skills, it was often related to high valence and arousal emotions such as excitement or enthusiasm. A happier or a more tranquil enjoyment was related to situations of moderate challenge and high skills. Experiences differed clearly between various natural study environments. At lectures students were often bored or mentally absent, and did not experience challenges. In a small group students were often excited or enthusiastic, and showed optimal balance between challenge and skills. At library students felt satisfied and were engaged in highly challenging work.

Pelaamiskokemukset ja pelaamisen yksilöllisten merkitysten yhteys flow n kokemiseen

The main goal of this study was to explore experiences induced by playing digital games (i.e. meaning of playing). In addition, the study aimed at structuring the larger entities of gaming experience. This was done by using theory-driven and data grounded approaches. Previously gaming experiences have not been explored as a whole. The consideration of gaming experiences on the basis of psychological theories and studies has also been rare. The secondary goal of this study was to clarify, whether the individual meanings of playing are connected with flow experience in an occasional gaming situation. Flow is an enjoyable experience and usually activities that induce flow are gladly repeated. Previously, flow has been proved to be an essential concept in the context of playing, but the relations between meanings of playing and flow have not been studied. The relations between gender and gaming experiences were examined throughout the study, as well as the relationship between gaming frequency and experiences. The study was divided into two sections, of which the first was composed according to the main goals. Its data was gathered by using an Internet questionnaire. The other section covered the themes that were formulated on the basis of the secondary aims. In that section, the participants played a driving game for 40 minutes and then filled in a questionnaire, which measured flow related experiences. In both sections, the participants were mainly young Finnish adults. All the participants in the second section (n = 60) had already participated in the first section (n = 267). Both qualitative and quantitative research techniques were used in the study. In the first section, freely described gaming experiences were classified according to the grounded theory. After that, the most common categories were further classified into the basic structures of gaming experience, some according to the existing theories of experience structure and some according to the data (i.e. grounded theory). In the other section flow constructs were measured and used as grouping variables in a cluster analysis. Three meaningful groups were compared regarding the meanings of gaming that were explored in the first section. The descriptions of gaming experiences were classified into four main categories, which were conceptions of the gaming process, emotions, motivations and focused attention. All the theory-driven categories were found in the data. This frame of reference can be utilized in future when reliability and validity of already existing methods for measuring gaming experiences are considered or new methods will be developed. The connection between the individual relevance of gaming and flow was minor. However, as the scope was specified to relations between primary meanings of playing and flow, it was noticed that attributing enjoyment to gaming did not lead to the strongest flow-experiences. This implies that the issue should be studied more in future. As a whole this study proves that gamer-related research from numerous vantage points can benefit from concentrating on gaming experiences.

Psychophysiology of flow experience : An explorative study

This study explored the possibilities the psychophysiological methodology offer to flow research. Facial electromyography has often been used to index valence, and electrodermal activity to index arousal, the two basic dimensions of emotion. It was hypothesized that these measures can also be used to examine enjoyment, a basic component of flow experiment. A digital game was used to induce flow, and physiological activity of 32 subjects was measured continuously. Flow State Scale was used to assess flow. Activity of corrugator supercilii muscle, an index of negative valence, was negatively correlated with flow reports, as hypothesized. Contrary to hypothesis, skin conductance level, an index of arousal, was unrelated to self-reported flow. The results for association between flow and zygomaticus major and orbicularis oculi muscle activities, indices of positive valence, were inconclusive, possibly due to experimental design where only tonic measures were available. Psychophysiological methods are recommended for future studies of flow. Specifically, the time series approach may be particularly viable in examining the temporal aspects of flow, an area currently unexplored. Furthermore, it is suggested that digital game research would benefit from psychophysiological study of game-related flow.

Essays on socially optimal phosphorus policies in crop production

Phosphorus is a nutrient needed in crop production. While boosting crop yields it may also accelerate eutrophication in the surface waters receiving the phosphorus runoff. The privately optimal level of phosphorus use is determined by the input and output prices, and the crop response to phosphorus. Socially optimal use also takes into account the impact of phosphorus runoff on water quality. Increased eutrophication decreases the economic value of surface waters by Deteriorating fish stocks, curtailing the potential for recreational activities and by increasing the probabilities of mass algae blooms. In this dissertation, the optimal use of phosphorus is modelled as a dynamic optimization problem. The potentially plant available phosphorus accumulated in soil is treated as a dynamic state variable, the control variable being the annual phosphorus fertilization. For crop response to phosphorus, the state variable is more important than the annual fertilization. The level of this state variable is also a key determinant of the runoff of dissolved, reactive phosphorus. Also the loss of particulate phosphorus due to erosion is considered in the thesis, as well as its mitigation by constructing vegetative buffers. The dynamic model is applied for crop production on clay soils. At the steady state, the analysis focuses on the effects of prices, damage parameterization, discount rate and soil phosphorus carryover capacity on optimal steady state phosphorus use. The economic instruments needed to sustain the social optimum are also analyzed. According to the results the economic incentives should be conditioned on soil phosphorus values directly, rather than on annual phosphorus applications. The results also emphasize the substantial effects the differences in varying discount rates of the farmer and the social planner have on optimal instruments. The thesis analyzes the optimal soil phosphorus paths from its alternative initial levels. It also examines how erosion susceptibility of a parcel affects these optimal paths. The results underline the significance of the prevailing soil phosphorus status on optimal fertilization levels. With very high initial soil phosphorus levels, both the privately and socially optimal phosphorus application levels are close to zero as the state variable is driven towards its steady state. The soil phosphorus processes are slow. Therefore, depleting high phosphorus soils may take decades. The thesis also presents a methodologically interesting phenomenon in problems of maximizing the flow of discounted payoffs. When both the benefits and damages are related to the same state variable, the steady state solution may have an interesting property, under very general conditions: The tail of the payoffs of the privately optimal path as well as the steady state may provide a higher social welfare than the respective tail of the socially optimal path. The result is formalized and an applied to the created framework of optimal phosphorus use.

Asymmetrical flow field-flow fractionation in the study of water-soluble macromolecules

Asymmetrical flow field-flow fractionation (AsFlFFF) was constructed, and its applicability to industrial, biochemical, and pharmaceutical applications was studied. The effect of several parameters, such as pH, ionic strength, temperature and the reactants mixing ratios on the particle sizes, molar masses, and the formation of aggregates of macromolecules was determined by AsFlFFF. In the case of industrial application AsFlFFF proved to be a valuable tool in the characterization of the hydrodynamic particle sizes, molar masses and phase transition behavior of various poly(N-isopropylacrylamide) (PNIPAM) polymers as a function of viscosity and phase transition temperatures. The effect of sodium chloride salt and the molar ratio of cationic and anionic polyelectrolytes on the hydrodynamic particle sizes of poly (methacryloxyethyl trimethylammonium chloride) and poly (ethylene oxide)-block-poly (sodium methacrylate) and their complexes were studied. The particle sizes of PNIPAM polymers, and polyelectrolyte complexes measured by AsFlFFF were in agreement with those obtained by dynamic light scattering. The molar masses of PNIPAM polymers obtained by AsFlFFF and size exclusion chromatography agreed also well. In addition, AsFlFFF proved to be a practical technique in thermo responsive behavior studies of polymers at temperatures up to about 50 oC. The suitability of AsFlFFF for biological, biomedical, and pharmaceutical applications was proved, upon studying the lipid-protein/peptide interactions, and the stability of liposomes at different temperatures. AsFlFFF was applied to the studies on the hydrophobic and electrostatic interactions between cytochrome c (a basic peripheral protein) and anionic lipid, and oleic acid, and sodium dodecyl sulphate surfactant. A miniaturized AsFlFFF constructed in this study was exploited in the elucidation of the effect of copper (II), pH, ionic strength, and vortexing on the particle sizes of low-density lipoproteins.

Topographical, structural and geophysical characterization of fracture zones: implications for groundwater flow and vulnerability

The main objective of this study is to evaluate selected geophysical, structural and topographic methods on regional, local, and tunnel and borehole scales, as indicators of the properties of fracture zones or fractures relevant to groundwater flow. Such information serves, for example, groundwater exploration and prediction of the risk of groundwater inflow in underground construction. This study aims to address how the features detected by these methods link to groundwater flow in qualitative and semi-quantitative terms and how well the methods reveal properties of fracturing affecting groundwater flow in the studied sites. The investigated areas are: (1) the Päijänne Tunnel for water-conveyance whose study serves as a verification of structures identified on regional and local scales; (2) the Oitti fuel spill site, to telescope across scales and compare geometries of structural assessment; and (3) Leppävirta, where fracturing and hydrogeological environment have been studied on the scale of a drilled well. The methods applied in this study include: the interpretation of lineaments from topographic data and their comparison with aeromagnetic data; the analysis of geological structures mapped in the Päijänne Tunnel; borehole video surveying; groundwater inflow measurements; groundwater level observations; and information on the tunnel s deterioration as demonstrated by block falls. The study combined geological and geotechnical information on relevant factors governing groundwater inflow into a tunnel and indicators of fracturing, as well as environmental datasets as overlays for spatial analysis using GIS. Geophysical borehole logging and fluid logging were used in Leppävirta to compare the responses of different methods to fracturing and other geological features on the scale of a drilled well. Results from some of the geophysical measurements of boreholes were affected by the large diameter (gamma radiation) or uneven surface (caliper) of these structures. However, different anomalies indicating more fractured upper part of the bedrock traversed by well HN4 in Leppävirta suggest that several methods can be used for detecting fracturing. Fracture trends appear to align similarly on different scales in the zone of the Päijänne Tunnel. For example, similarities of patterns were found between the regional magnetic trends, correlating with orientations of topographic lineaments interpreted as expressions of fracture zones. The same structural orientations as those of the larger structures on local or regional scales were observed in the tunnel, even though a match could not be made in every case. The size and orientation of the observation space (patch of terrain at the surface, tunnel section, or borehole), the characterization method, with its typical sensitivity, and the characteristics of the location, influence the identification of the fracture pattern. Through due consideration of the influence of the sampling geometry and by utilizing complementary fracture characterization methods in tandem, some of the complexities of the relationship between fracturing and groundwater flow can be addressed. The flow connections demonstrated by the response of the groundwater level in monitoring wells to pressure decrease in the tunnel and the transport of MTBE through fractures in bedrock in Oitti, highlight the importance of protecting the tunnel water from a risk of contamination. In general, the largest values of drawdown occurred in monitoring wells closest to the tunnel and/or close to the topographically interpreted fracture zones. It seems that, to some degree, the rate of inflow shows a positive correlation with the level of reinforcement, as both are connected with the fracturing in the bedrock. The following geological features increased the vulnerability of tunnel sections to pollution, especially when several factors affected the same locations: (1) fractured bedrock, particularly with associated groundwater inflow; (2) thin or permeable overburden above fractured rock; (3) a hydraulically conductive layer underneath the surface soil; and (4) a relatively thin bedrock roof above the tunnel. The observed anisotropy of the geological media should ideally be taken into account in the assessment of vulnerability of tunnel sections and eventually for directing protective measures.

Gene flow from transgenic plant populations: models and applications for risk assessment

The future use of genetically modified (GM) plants in food, feed and biomass production requires a careful consideration of possible risks related to the unintended spread of trangenes into new habitats. This may occur via introgression of the transgene to conventional genotypes, due to cross-pollination, and via the invasion of GM plants to new habitats. Assessment of possible environmental impacts of GM plants requires estimation of the level of gene flow from a GM population. Furthermore, management measures for reducing gene flow from GM populations are needed in order to prevent possible unwanted effects of transgenes on ecosystems. This work develops modeling tools for estimating gene flow from GM plant populations in boreal environments and for investigating the mechanisms of the gene flow process. To describe spatial dimensions of the gene flow, dispersal models are developed for the local and regional scale spread of pollen grains and seeds, with special emphasis on wind dispersal. This study provides tools for describing cross-pollination between GM and conventional populations and for estimating the levels of transgenic contamination of the conventional crops. For perennial populations, a modeling framework describing the dynamics of plants and genotypes is developed, in order to estimate the gene flow process over a sequence of years. The dispersal of airborne pollen and seeds cannot be easily controlled, and small amounts of these particles are likely to disperse over long distances. Wind dispersal processes are highly stochastic due to variation in atmospheric conditions, so that there may be considerable variation between individual dispersal patterns. This, in turn, is reflected to the large amount of variation in annual levels of cross-pollination between GM and conventional populations. Even though land-use practices have effects on the average levels of cross-pollination between GM and conventional fields, the level of transgenic contamination of a conventional crop remains highly stochastic. The demographic effects of a transgene have impacts on the establishment of trangenic plants amongst conventional genotypes of the same species. If the transgene gives a plant a considerable fitness advantage in comparison to conventional genotypes, the spread of transgenes to conventional population can be strongly increased. In such cases, dominance of the transgene considerably increases gene flow from GM to conventional populations, due to the enhanced fitness of heterozygous hybrids. The fitness of GM plants in conventional populations can be reduced by linking the selectively favoured primary transgene to a disfavoured mitigation transgene. Recombination between these transgenes is a major risk related to this technique, especially because it tends to take place amongst the conventional genotypes and thus promotes the establishment of invasive transgenic plants in conventional populations.

Substance flow analysis in Finland : Four case studies on N and P flows

Nitrogen (N) and phosphorus (P) are essential elements for all living organisms. However, in excess, they contribute to several environmental problems such as aquatic and terrestrial eutrophication. Globally, human action has multiplied the volume of N and P cycling since the onset of industrialization. The multiplication is a result of intensified agriculture, increased energy consumption and population growth. Industrial ecology (IE) is a discipline, in which human interaction with the ecosystems is investigated using a systems analytical approach. The main idea behind IE is that industrial systems resemble ecosystems, and, like them, industrial systems can then be described using material, energy and information flows and stocks. Industrial systems are dependent on the resources provided by the biosphere, and these two cannot be separated from each other. When studying substance flows, the aims of the research from the viewpoint of IE can be, for instance, to elucidate the ways how the cycles of a certain substance could be more closed and how the flows of a certain substance could be decreased per unit of production (= dematerialization). In Finland, N and P are studied widely in different ecosystems and environmental emissions. A holistic picture comparing different societal systems is, however, lacking. In this thesis, flows of N and P were examined in Finland using substance flow analysis (SFA) in the following four subsystems: I) forest industry and use of wood fuels, II) food production and consumption, III) energy, and IV) municipal waste. A detailed analysis at the end of the 1990s was performed. Furthermore, historical development of the N and P flows was investigated in the energy system (III) and the municipal waste system (IV). The main research sources were official statistics, literature, monitoring data, and expert knowledge. The aim was to identify and quantify the main flows of N and P in Finland in the four subsystems studied. Furthermore, the aim was to elucidate whether the nutrient systems are cyclic or linear, and to identify how these systems could be more efficient in the use and cycling of N and P. A final aim was to discuss how this type of an analysis can be used to support decision-making on environmental problems and solutions. Of the four subsystems, the food production and consumption system and the energy system created the largest N flows in Finland. For the creation of P flows, the food production and consumption system (Paper II) was clearly the largest, followed by the forest industry and use of wood fuels and the energy system. The contribution of Finland to N and P flows on a global scale is low, but when compared on a per capita basis, we are one of the largest producers of these flows, with relatively high energy and meat consumption being the main reasons. Analysis revealed the openness of all four systems. The openness is due to the high degree of internationality of the Finnish markets, the large-scale use of synthetic fertilizers and energy resources and the low recycling rate of many waste fractions. Reduction in the use of fuels and synthetic fertilizers, reorganization of the structure of energy production, reduced human intake of nutrients and technological development are crucial in diminishing the N and P flows. To enhance nutrient recycling and replace inorganic fertilizers, recycling of such wastes as wood ash and sludge could be promoted. SFA is not usually sufficiently detailed to allow specific recommendations for decision-making to be made, but it does yield useful information about the relative magnitude of the flows and may reveal unexpected losses. Sustainable development is a widely accepted target for all human action. SFA is one method that can help to analyse how effective different efforts are in leading to a more sustainable society. SFA's strength is that it allows a holistic picture of different natural and societal systems to be drawn. Furthermore, when the environmental impact of a certain flow is known, the method can be used to prioritize environmental policy efforts.