Executive Stock Options: Exercise Policy and Market Reaction

In this paper I investigate the exercise policy, and the market reaction to that, of the executive stock option holders in Finland. The empirical tests are conducted with aggregated firm level data from 34 firms and 41 stock option programs. I find some evidence of an inverse relation between the exercise intensity of the options holders and the future abnormal return of the company share price. This finding is supported by the view that information about future company prospect seems to be the only theoretical attribute that could delay the exercise of the options. Moreover, a high concentration of exercises in the beginning of the exercise window is predicted and the market is expected to react to deviations from this. The empirical findings however show that the market does not react homogenously to the information revealed by the late exercises.

The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.

Ionic Liquids and Microwaves in Promotion of Organic Synthesis : Friedel-Crafts reaction, deuterolabelling and O-Demethylation

The use of ionic liquids in chemical research has gained considerable interest and activity in recent years. Due to their unique and varied physicochemical properties, in comparison to molecular solvents, the potential applications for ionic liquids are enormous. The use of microwave irradiation, as a powerful dielectric heating technique, in synthetic organic chemistry has been known since 1986. Since then, it has gained significant recognition for its research and application in both academia and industry. The use of either ionic liquids or microwave irradiation in synthetic organic chemistry has been known to afford improved, alternative or complimentary selectivities, in comparison to traditional processes. In this study, the use of ionic liquids as solvents, co-solvents and catalytic media was explored in Friedel-Crafts, deuterolabelling and O-demethylation reactions. Alternative methods for the production of a variety of aromatic ketones using the Friedel-Crafts acylation methodology were investigated using ionic liquid catalyst or ionic liquid acidic additive systems. The disclosed methods, i.e. metal bistriflamides and chloroindate ionic liquids systems, possessed good catalytic activity in the synthesis of typical benzophenones. These catalytic systems were also recyclable. Microwave irradiation was found to be useful in the synthesis of various polyhydroxydeoxybenzoins and arylpropanones as synthetic precursors to naturally occurring or potentially bioactive compounds. Under optimized condition, the reaction occurred in only four minutes using systems such as [bmim][NTf2]/HNTf2 and [bmim][BF4]/BF3·OEt2. Naturally occurring polyphenols, such as isoflavones, can possess various types of biological or pharmacological activity. In particular, some are noted for their beneficial effects on human health. Isotopically labelled analogues of polyphenols are valuable as analytical standards in the quantification of these compounds from biological matrices. A new strategy for deuterolabelling of polyphenols was developed using ionic liquids as co-solvents and 35% DCl/D2O, as a cheap deuterium source, under microwave irradiation. Under these conditions, perdeuterated compounds were achieved in short reaction times, in high isotopic purity and in excellent yields. An O-demethylation reaction was developed, using an ionic liquid reaction medium with BBr3 for the deprotection of a variety methyl protected polyphenolic compounds, such as isoflavons and lignans. This deprotection procedure was found to be very practical as the reaction occurred under mild reaction conditions and in short reaction times. The isolation and purification steps were particularly straightforward and high yielding, in comparison to traditional methods.

Proton translocation coupled to electron transfer reactions in terminal oxidases

Terminal oxidases are the final proteins of the respiratory chain in eukaryotes and some bacteria. They catalyze most of the biological oxygen consumption on Earth done by aerobic organisms. During the catalytic reaction terminal oxidases reduce dioxygen to water and use the energy released in this process to maintain the electrochemical proton gradient by functioning as a redox-driven proton pump. This membrane gradient of protons is extremely important for cells as it is used for many cellular processes, such as transportation of substrates and ATP synthesis. Even though the structures of several terminal oxidases are known, they are not sufficient in themselves to explain the molecular mechanism of proton pumping. In this work we have applied a complex approach using a variety of different techniques to address the properties and the mechanism of proton translocation by the terminal oxidases. The combination of direct measurements of pH changes during catalytic turnover, time-resolved potentiometric electrometry and optical spectroscopy, made it possible to obtain valuable information about various aspects of oxidase functioning. We compared oxygen binding properties of terminal oxidases from the distinct heme-copper (CcO) and cytochrome bd families and found that cytochrome bd has a high affinity for oxygen, which is 3 orders of magnitude higher than that of CcO. Interestingly, the difference between CcO and cytochrome bd is not only in higher affinity of the latter to oxygen, but also in the way that each of these enzymes traps oxygen during catalysis. CcO traps oxygen kinetically - the molecule of bound dioxygen is rapidly reduced before it can dissociate. Alternatively, cytochrome bd employs an alternative mechanism of oxygen trapping - part of the redox energy is invested into tight oxygen binding, and the price paid for this is the lack of proton pumping. A single cycle of oxygen reduction to water is characterized by translocation of four protons across the membrane. Our results make it possible to assign the pumping steps to discrete transitions of the catalytic cycle and indicate that during in vivo turnover of the oxidase these four protons are transferred, one at a time, during the P→F, F→OH, Oh→Eh, and Eh→R transitions. At the same time, each individual proton translocation step in the catalytic cycle is not just a single reaction catalyzed by CcO, but rather a complicated sequence of interdependent electron and proton transfers. We assume that each single proton translocation cycle of CcO is assured by internal proton transfer from the conserved Glu-278 to an as yet unidentified pump site above the hemes. Delivery of a proton to the pump site serves as a driving reaction that forces the proton translocation cycle to continue.

The effects of the 2004 reduction in the price of alcohol on alcohol-related harm in Finland : A natural experiment based on register data

Changes in alcohol pricing have been documented as inversely associated with changes in consumption and alcohol-related problems. Evidence of the association between price changes and health problems is nevertheless patchy and is based to a large extent on cross-sectional state-level data, or time series of such cross-sectional analyses. Natural experimental studies have been called for. There was a substantial reduction in the price of alcohol in Finland in 2004 due to a reduction in alcohol taxes of one third, on average, and the abolition of duty-free allowances for travellers from the EU. These changes in the Finnish alcohol policy could be considered a natural experiment, which offered a good opportunity to study what happens with regard to alcohol-related problems when prices go down. The present study investigated the effects of this reduction in alcohol prices on (1) alcohol-related and all-cause mortality, and mortality due to cardiovascular diseases, (2) alcohol-related morbidity in terms of hospitalisation, (3) socioeconomic differentials in alcohol-related mortality, and (4) small-area differences in interpersonal violence in the Helsinki Metropolitan area. Differential trends in alcohol-related mortality prior to the price reduction were also analysed. A variety of population-based register data was used in the study. Time-series intervention analysis modelling was applied to monthly aggregations of deaths and hospitalisation for the period 1996-2006. These and other mortality analyses were carried out for men and women aged 15 years and over. Socioeconomic differentials in alcohol-related mortality were assessed on a before/after basis, mortality being followed up in 2001-2003 (before the price reduction) and 2004-2005 (after). Alcohol-related mortality was defined in all the studies on mortality on the basis of information on both underlying and contributory causes of death. Hospitalisation related to alcohol meant that there was a reference to alcohol in the primary diagnosis. Data on interpersonal violence was gathered from 86 administrative small-areas in the Helsinki Metropolitan area and was also assessed on a before/after basis followed up in 2002-2003 and 2004-2005. The statistical methods employed to analyse these data sets included time-series analysis, and Poisson and linear regression. The results of the study indicate that alcohol-related deaths increased substantially among men aged 40-69 years and among women aged 50-69 after the price reduction when trends and seasonal variation were taken into account. The increase was mainly attributable to chronic causes, particularly liver diseases. Mortality due to cardiovascular diseases and all-cause mortality, on the other hand, decreased considerably among the-over-69-year-olds. The increase in alcohol-related mortality in absolute terms among the 30-59-year-olds was largest among the unemployed and early-age pensioners, and those with a low level of education, social class or income. The relative differences in change between the education and social class subgroups were small. The employed and those under the age of 35 did not suffer from increased alcohol-related mortality in the two years following the price reduction. The gap between the age and education groups, which was substantial in the 1980s, thus further broadened. With regard to alcohol-related hospitalisation, there was an increase in both chronic and acute causes among men under the age of 70, and among women in the 50-69-year age group when trends and seasonal variation were taken into account. Alcohol dependence and other alcohol-related mental and behavioural disorders were the largest category in both the total number of chronic hospitalisation and in the increase. There was no increase in the rate of interpersonal violence in the Helsinki Metropolitan area, and even a decrease in domestic violence. There was a significant relationship between the measures of social disadvantage on the area level and interpersonal violence, although the differences in the effects of the price reduction between the different areas were small. The findings of the present study suggest that that a reduction in alcohol prices may lead to a substantial increase in alcohol-related mortality and morbidity. However, large population group differences were observed regarding responsiveness to the price changes. In particular, the less privileged, such as the unemployed, were most sensitive. In contrast, at least in the Finnish context, the younger generations and the employed do not appear to be adversely affected, and those in the older age groups may even benefit from cheaper alcohol in terms of decreased rates of CVD mortality. The results also suggest that reductions in alcohol prices do not necessarily affect interpersonal violence. The population group differences in the effects of the price changes on alcohol-related harm should be acknowledged, and therefore the policy actions should focus on the population subgroups that are primarily responsive to the price reduction.

The significance of brittle reaction layers in fusing of dental ceramics to titanium

This thesis comprises four intercomplementary parts that introduce new approaches to brittle reaction layers and mechanical compatibility of metalloceramic joints created when fusing dental ceramics to titanium. Several different methods including atomic layer deposition (ALD), sessile drop contact angle measurements, scanning acoustic microscopy (SAM), three-point bending (TPB, DIN 13 927 / ISO 9693), cross-section microscopy, scanning electron microscopy (SEM), and energy dispersive X-ray spectroscopy (EDS) were employed. The first part investigates the effects of TiO2 layer structure and thickness on the joint strength of the titanium-metalloceramic system. Samples with all tested TiO2 thicknesses displayed good ceramics adhesion to Ti, and uniform TPB results. The fracture mode was independent of oxide layer thickness and structure. Cracking occurred deeper inside titanium, in the oxygen-rich Ti[O]x solid solution surface layer. During dental ceramics firing TiO2 layers dissociate and joints become brittle with increased dissolution of oxygen into metallic Ti and consequent reduction in the metal plasticity. To accomplish an ideal metalloceramic joint this needs to be resolved. The second part introduces photoinduced superhydrophilicity of TiO2. Test samples with ALD deposited anatase TiO2 films were produced. Samples were irradiated with UV light to induce superhydrophilicity of the surfaces through a cascade leading to increased amount of surface hydroxyl groups. Superhydrophilicity (contact angle ~0˚) was achieved within 2 minutes of UV radiation. Partial recovery of the contact angle was observed during the first 10 minutes after UV exposure. Total recovery was not observed within 24h storage. Photoinduced ultrahydrophilicity can be used to enhance wettability of titanium surfaces, an important factor in dental ceramics veneering processes. The third part addresses interlayers designed to restrain oxygen dissolution into Ti during dental ceramics fusing. The main requirements for an ideal interlayer material are proposed. Based on these criteria and systematic exclusion of possible interlayer materials silver (Ag) interlayers were chosen. TPB results were significantly better in when 5 μm Ag interlayers were used compared to only Al2O3-blasted samples. In samples with these Ag interlayers multiple cracks occurred inside dental ceramics, none inside Ti structure. Ag interlayers of 5 μm on Al2O3-blasted samples can be efficiently used to retard formation of the brittle oxygen-rich Ti[O]x layer, thus enhancing metalloceramic joint integrity. The most brittle component in metalloceramic joints with 5 μm Ag interlayers was bulk dental ceramics instead of Ti[O]x. The fourth part investigates the importance of mechanical interlocking. According to the results, the significance of mechanical interlocking achieved by conventional surface treatments can be questioned as long as the formation of the brittle layers (mainly oxygen-rich Ti[O]x) cannot be sufficiently controlled. In summary in contrast to former impressions of thick titanium oxide layers this thesis clearly demonstrates diffusion of oxygen from sintering atmosphere and SiO2 to Ti structures during dental ceramics firing and the following formation of brittle Ti[O]x solid solution as the most important factors predisposing joints between Ti and SiO2-based dental ceramics to low strength. This among other predisposing factors such as residual stresses created by the coefficient of thermal expansion mismatch between dental ceramics and Ti frameworks can be avoided with Ag interlayers.

Disjunct eddy covariance measurements of volatile organic compound fluxes using proton transfer reaction mass spectrometry

Volatile organic compounds (VOCs) are emitted into the atmosphere from natural and anthropogenic sources, vegetation being the dominant source on a global scale. Some of these reactive compounds are deemed major contributors or inhibitors to aerosol particle formation and growth, thus making VOC measurements essential for current climate change research. This thesis discusses ecosystem scale VOC fluxes measured above a boreal Scots pine dominated forest in southern Finland. The flux measurements were performed using the micrometeorological disjunct eddy covariance (DEC) method combined with proton transfer reaction mass spectrometry (PTR-MS), which is an online technique for measuring VOC concentrations. The measurement, calibration, and calculation procedures developed in this work proved to be well suited to long-term VOC concentration and flux measurements with PTR-MS. A new averaging approach based on running averaged covariance functions improved the determination of the lag time between wind and concentration measurements, which is a common challenge in DEC when measuring fluxes near the detection limit. The ecosystem scale emissions of methanol, acetaldehyde, and acetone were substantial. These three oxygenated VOCs made up about half of the total emissions, with the rest comprised of monoterpenes. Contrary to the traditional assumption that monoterpene emissions from Scots pine originate mainly as evaporation from specialized storage pools, the DEC measurements indicated a significant contribution from de novo biosynthesis to the ecosystem scale monoterpene emissions. This thesis offers practical guidelines for long-term DEC measurements with PTR-MS. In particular, the new averaging approach to the lag time determination seems useful in the automation of DEC flux calculations. Seasonal variation in the monoterpene biosynthesis and the detailed structure of a revised hybrid algorithm, describing both de novo and pool emissions, should be determined in further studies to improve biological realism in the modelling of monoterpene emissions from Scots pine forests. The increasing number of DEC measurements of oxygenated VOCs will probably enable better estimates of the role of these compounds in plant physiology and tropospheric chemistry. Keywords: disjunct eddy covariance, lag time determination, long-term flux measurements, proton transfer reaction mass spectrometry, Scots pine forests, volatile organic compounds

Essays on Market Microstructure: Price Discovery and Informed Trading

Market microstructure is “the study of the trading mechanisms used for financial securities” (Hasbrouck (2007)). It seeks to understand the sources of value and reasons for trade, in a setting with different types of traders, and different private and public information sets. The actual mechanisms of trade are a continually changing object of study. These include continuous markets, auctions, limit order books, dealer markets, or combinations of these operating as a hybrid market. Microstructure also has to allow for the possibility of multiple prices. At any given time an investor may be faced with a multitude of different prices, depending on whether he or she is buying or selling, the quantity he or she wishes to trade, and the required speed for the trade. The price may also depend on the relationship that the trader has with potential counterparties. In this research, I touch upon all of the above issues. I do this by studying three specific areas, all of which have both practical and policy implications. First, I study the role of information in trading and pricing securities in markets with a heterogeneous population of traders, some of whom are informed and some not, and who trade for different private or public reasons. Second, I study the price discovery of stocks in a setting where they are simultaneously traded in more than one market. Third, I make a contribution to the ongoing discussion about market design, i.e. the question of which trading systems and ways of organizing trading are most efficient. A common characteristic throughout my thesis is the use of high frequency datasets, i.e. tick data. These datasets include all trades and quotes in a given security, rather than just the daily closing prices, as in traditional asset pricing literature. This thesis consists of four separate essays. In the first essay I study price discovery for European companies cross-listed in the United States. I also study explanatory variables for differences in price discovery. In my second essay I contribute to earlier research on two issues of broad interest in market microstructure: market transparency and informed trading. I examine the effects of a change to an anonymous market at the OMX Helsinki Stock Exchange. I broaden my focus slightly in the third essay, to include releases of macroeconomic data in the United States. I analyze the effect of these releases on European cross-listed stocks. The fourth and last essay examines the uses of standard methodologies of price discovery analysis in a novel way. Specifically, I study price discovery within one market, between local and foreign traders.