Puukaupan säännöt : Yksityismetsänomistajien ja metsäteollisuuden puukauppa Itä-Suomessa 1919 - 1939

The Finnish forest industry bought more than half of the timber used in factories and sawmills in the 1930s from non-industrial private forests (NIPF). This research investigates the rules conformed to this timber trade. The main research questions are: what were the rules that influenced the timber trade; and by whom they were set up? Attention is also paid to the factors which advanced the forest owners’ negotiation possibilities. A variety of sources were used: legal and company statutes, timber trade contracts, archives of the forest companies and organisations. Moreover, the written reminiscences collected by the Finnish Literature Society in the early 1970s were used to analyse the views of individual sellers and buyers. An institutional economics approach was applied as the theoretical framework of this study. In the timber trade the seller (forest owner) and the buyer (the employee of the forest company) agreed to the rules of the timber trade. They agreed about the amount and the price of the timber on sale, but also rules concerning, e.g., timber marking and harvesting. The forest companies had a strong control over the written contracts. Neither the private forest owners nor the forest organisations had much influence over these contracts. However, they managed to influence the rules which could not be found in the contracts. These written and unwritten rules regulated, for instance, the timber marking and measurement. The forest organisations such as Central Forestry Board Tapio (Keskusmetsäseura Tapio) and associations of forest owners (metsänhoitoyhdistykset) helped private forest owners in gaining more control over the timber marking. In timber marking, the forest owner selected trees to be included in the timber trade and gained more information, which he could use in the negotiations. The other rule, which was changed despite forest companies’ resistance, was the timber measurement. The Central Union of Agricultural Producers (MTK) negotiated with the Central Association of Finnish Woodworking Industries (SPKL) about changing the rules of the measurement practices. Even though SPKL did not support any changes, the new timber measurement law was accepted in the year 1938. The new law also created a supervisory authority to solve possible disagreements. Despite this the forest companies were still in charge of the measurement process in most cases. The private forest owners attained changes in the rules of the timber trade mainly during the 1930s. Earlier the relative weakness of the private forest organisations had diminished their negotiation positions. This changed in the 1930s as the private forest owners and their organisations became more active. At the same time the forest industry experienced a shortage of timber, especially pulp wood, and this provided the private forest owners with more leverage. Full-text (in Finnish) available at http://helda.helsinki.fi/handle/10224/4081

Paimen vailla hiippakuntaa : Kenttäpiispan viran synty ja vaikutus sotilaspapiston asemaan Suomen puolustusvoimissa ja kirkossa vuosina 1939 - 1944

The main purpose of this research is to shed light on the factors that gave rise to the office of Field Bishop in the years 1939-1944. How did military bishophood affect the status of the head of military pastoral care and military clergy during these years? The main sources of my research are the collections in the Finnish National Archives, and I use a historical-qualitative method. The position of the military clergy was debated within both the Church and the Defence Forces before 1939. At that stage, Church law did not yet recognize the office of the leading military priest, the Field Dean. There had been a motion in 1932 to introduce the office of a military bishop, but the bishops' synod blocked it. The concept of Field Bishop appeared for the first time in 1927 in a Finnish military document, which dealt with pastoral care in the Polish military. The Field Dean in Finland had regularly proposed improvements to the salary of the military clergy before the Winter War. After the Winter War, arguments were made for strengthening the position of the military clergy: these arguments were based on the increased respect shown towards this clergy, especially due to their role in the care of the fallen, which had become their task during the war. Younger members of the military clergy in particular supported the demands to improve their position within the Church and the army. The creation of a Field Bishop was perceived as strengthening the whole military clergy, as the Field Bishop was envisioned as a bishop within the Church and a general within the Defence Forces. During that time the Field Dean was still without any military rank. The idea of a Field Bishop was recommended to Mannerheim in June 1940, after which the Defence Forces lent their support to the cause. The status of the military clergy, in Church law, made it to the agenda of the Church council in January 1941, thanks largely to the younger priests' group influence and Mannerheim's leverage. The bishops opposed the notion of a Field Bishop mostly on theological grounds but were ready to concede that the position the Field Dean in Church law required further defining. The creation of the office of Field Bishop was blocked in the Church law committee report issued close to the beginning of the Continuation War. The onset of that war, however, changed the course of events, as the President of the Republic appointed Field Dean Johannes Björklund as Field Bishop. Speculation has abounded about Mannerheim's role in the appointment, but the truth of the matter is not clear. The title of Field Bishop was used to put pressure on the Church, and, at the same time, Mannerheim could remain detached from the matter. Later, in September 1941, the Church council approved the use of the Field Bishop title to denote the head of military pastoral care in Church law, and Field Bishops were assigned some of the duties formerly pertaining to bishops. Despite all expectations and hopes, the new office of Field Bishop did not affect the status of the military clergy within the Defence Forces, as no ranks were established for them, and their salary did not improve. However the office of the Field Bishop within Army HQ was transformed from a bureau into a department in the summer of 1942. At the beginning of the Continuation War, the Field Bishop was criticized by certain military and Church clergy for favouring Russian Orthodox Christians in Eastern Karelia. Björklund agreed in principle with most of the Lutheran clergy on the necessity of Lutheranizing East Karelia but had to take into account the realities at Army HQ. As well, at the same time the majority of the younger clergy were serving in the army, and there was a lack of parish priests on the home front. Bishop Lehtonen had actually expressed the wish that more priests could have been released from the front to serve in local parishes. In his notes Lehtonen accused Björklund of trying to achieve the position of Field Bishop by all possible means. However, research has revealed a varied group of people behind the creation of the office of Field Bishop, including in particular younger clergy and the Defence Forces.

Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

The Influence of World Factors on Finnish Stock Market Volatility

This paper investigates to what extent the volatility of Finnish stock portfolios is transmitted through the "world volatility". We operationalize the volatility processes of Finnish leverage, industry, and size portfolio returns by asymmetric GARCH specifications according to Glosten et al. (1993). We use daily return data for January, 2, 1987 to December 30, 1998. We find that the world shock significantly enters the domestic models, and that the impact has increased over time. This applies also for the variance ratios, and the correlations to the world. The larger the firm, the larger is the world impact. The conditional variance is higher during recessions. The asymmetry parameter is surprisingly non-significant, and the leverage hypothesis cannot be verified. The return generating process of the domestic portfolio returns does usually not include the world information set, thus indicating that the returns are generated by a segmented conditional asset pricing model.

Stock Option Compensation in Finland: An Analysis of Economic Determinants, Contracting Frequency, and Design

This paper addresses several questions in the compensation literature by examining stock option compensation practices of Finnish firms. First, the results indicate that principal-agent theory succeeds quite well in predicting the use of stock options. Proxies for monitoring costs, growth opportunities, ownership structure, and risk are found to determine the use of incentives consistent with theory. Furthermore, the paper examines whether determinants of stock options targeted to top management differ from determinants of broad-based stock option plans. Some evidence is found that factors driving these two types of incentives differ. Second, the results reveal that systematic risk significantly increases the likelihood that firms adopt stock option plans, whereas total firm risk and unsystematic risk do not seem to affect this decision. Third, the results show that growth opportunities are related to time-dimensional contracting frequency, consistent with the argument that incentive levels deviate more rapidly from optimum in firms with high growth opportunities. Finally, the results suggest that vesting schedules are decreasing in financial leverage, and that contract maturity is decreasing in firm focus. In addition, both vesting schedules and contract maturity tend to be longer in firms involving state ownership.