Appropriate Institutions and Economic Growth - one size fits no-one

Modern-day economics is increasingly biased towards believing that institutions matter for growth, an argument that has been further enforced by the recent economic crisis. There is also a wide consensus on what these growth-promoting institutions should look like, and countries are periodically ranked depending on how their institutional structure compares with the best-practice institutions, mostly in place in the developing world. In this paper, it is argued that ”non-desirable” or “second-best” institutions can be beneficial for fostering investment and thus providing a starting point for sustained growth, and that what matters is the appropriateness of institutions to the economy’s distance to the frontier or current phase of development. Anecdotal evidence from Japan and South-Korea is used as a motivation for studying the subject and a model is presented to describe this phenomenon. In the model, the rigidity or non-rigidity of the institutions is described by entrepreneurial selection. It is assumed that entrepreneurs are the ones taking part in the imitation and innovation of technologies, and that decisions on whether or not their projects are refinanced comes from capitalists. The capitalists in turn have no entrepreneurial skills and act merely as financers of projects. The model has two periods, and two kinds of entrepreneurs: those with high skills and those with low skills. The society’s choice of whether an imitation or innovation – based strategy is chosen is modeled as the trade-off between refinancing a low-skill entrepreneur or investing in the selection of the entrepreneurs resulting in a larger fraction of high-skill entrepreneurs with the ability to innovate but less total investment. Finally, a real-world example from India is presented as an initial attempt to test the theory. The data from the example is not included in this paper. It is noted that the model may be lacking explanatory power due to difficulties in testing the predictions, but that this should not be seen as a reason to disregard the theory – the solution might lie in developing better tools, not better just better theories. The conclusion presented is that institutions do matter. There is no one-size-fits-all-solution when it comes to institutional arrangements in different countries, and developing countries should be given space to develop their own institutional structures that cater to their specific needs.

Poverty and the Environment : Investment Poverty and the Role of Assets in Generating Welfare for Farmer Households in the Province of Herrera, Panama

Köyhiä maanviljelijöitä on usein syytetty kehitysmaiden ympäristöongelmista. On väitetty, että eloonjäämistaistelu pakottaa heidät käyttämään maata ja muita luonnonvaroja lyhytnäköisesti. Harva asiaa koskeva tutkimus on kuitenkaan tukenut tätä väitettä; perheiden köyhyyden astetta ja heidän aiheuttamaansa ympäristövaikutusta ei ole kyetty kytkemään toisiinsa. Selkeyttääkseen köyhyys-ympäristö –keskustelua, Thomas Reardon ja Steven Vosti kehittivät investointiköyhyyden käsitteen. Se tunnistaa sen kenties suuren joukon maanviljelijäperheitä, jotka eivät ole köyhiä perinteisten köyhyysmittareiden mukaan, mutta joiden hyvinvointi ei ole riittävästi köyhyysrajojen yläpuolella salliakseen perheen investoida kestävämpään maankäyttöön. Reardon ja Vosti korostivat myös omaisuuden vaikutusta perheiden hyvinvointiin, ja uskoivat sen vaikuttavan tuotanto- ja investointipäätöksiin. Tässä tutkimuksessa pyritään vastaamaan kahteen kysymykseen: Miten investointiköyhyyttä voidaan ymmärtää ja mitata? Ja, mikä on viljelijäperheiden omaisuuden hyvinvointia lisäävä vaikutus? Tätä tutkimusta varten haastateltiin 402 maanviljelijäperhettä Väli-Amerikassa, Panaman tasavallan Herreran läänissä. Näiden perheiden hyvinvointia mitattiin heidän kulutuksensa mukaan, ja paikalliset köyhyysrajat laskettiin paikallisen ruoan hinnan mukaan. Herrerassa ihminen tarvitsee keskimäärin 494 dollaria vuodessa saadakseen riittävän ravinnon, tai 876 dollaria vuodessa voidakseen ravinnon lisäksi kattaa muitakin välttämättömiä menoja. Ruoka- eli äärimmäisen köyhyyden rajan alle jäi 15,4% tutkituista perheistä, ja 33,6% oli jokseenkin köyhiä, eli saavutti kyllä riittävän ravitsemuksen, muttei kyennyt kustantamaan muita perustarpeitaan. Molempien köyhyysrajojen yläpuolelle ylsi siis 51% tutkituista perheistä. Näiden köyhyysryhmien välillä on merkittäviä eroavaisuuksia ei vain perheiden varallisuuden, tulojen ja investointistrategioiden välillä, mutta myös perheiden rakenteessa, elinympäristössä ja mahdollisuuksissa saada palveluja. Investointiköyhyyden mittaaminen osoittautui haastavaksi. Herrerassa viljelijät eivät tee investointeja puhtaasti ympäristönsuojeluun, eikä maankäytön kestävyyttä muutenkaan pystytty yhdistämään perheiden hyvinvoinnin tasoon. Siksi investointiköyhyyttä etsittiin sellaisena hyvinvoinnin tasona, jonka alapuolella elävien perheiden parissa tuottavat maanparannusinvestoinnit eivät enää ole suorassa suhteessa hyvinvointiin. Tällaisia investointeja ovat mm. istutetut aidat, lannoitus ja paranneltujen laiduntyyppien viljely. Havaittiin, että jos perheen hyvinvointi putoaa alle 1000 dollarin/henkilö/vuosi, tällaiset tuottavat maanparannusinvestoinnit muuttuvat erittäin harvinaisiksi. Investointiköyhyyden raja on siis noin kaksi kertaa riittävän ravitsemuksen hinta, ja sen ylitti 42,3% tutkituista perheistä. Heille on tyypillistä, että molemmat puolisot käyvät työssä, ovat korkeasti koulutettuja ja yhteisössään aktiivisia, maatila tuottaa paremmin, tilalla kasvatetaan vaativampia kasveja, ja että he ovat kerryttäneet enemmän omaisuutta kuin investointi-köyhyyden rajan alla elävät perheet. Tässä tutkimuksessa kyseenalaistettiin yleinen oletus, että omaisuudesta olisi poikkeuksetta hyötyä viljelijäperheelle. Niinpä omaisuuden vaikutusta perheiden hyvinvointiin tutkittiin selvittämällä, mitä reittejä pitkin perheiden omistama maa, karja, koulutus ja työikäiset perheenjäsenet voisivat lisätä perheen hyvinvointia. Näiden hyvinvointi-mekanismien ajateltiin myös riippuvan monista väliin tulevista tekijöistä. Esimerkiksi koulutus voisi lisätä hyvinvointia, jos sen avulla saataisiin paremmin palkattuja töitä tai perustettaisiin yritys; mutta näihin mekanismeihin saattaa vaikuttaa vaikkapa etäisyys kaupungeista tai se, omistaako perhe ajoneuvon. Köyhimpien perheiden parissa nimenomaan koulutus olikin ainoa tutkittu omaisuuden muoto, joka edisti perheen hyvinvointia, kun taas maasta, karjasta tai työvoimasta ei ollut apua köyhyydestä nousemiseen. Varakkaampien perheiden parissa sen sijaan korkeampaa hyvinvointia tuottivat koulutuksen lisäksi myös maa ja työvoima, joskin monesta väliin tulevasta muuttujasta, kuten tuotantopanoksista riippuen. Ei siis ole automaatiota, jolla omaisuus parantaisi perheiden hyvinvointia. Vaikka rikkailla onkin yleensä enemmän karjaa kuin köyhemmillä, ei tässä aineistossa löydetty yhtään mekanismia, jota kautta karjan määrä tuottaisi korkeampaa hyvinvointia viljelijäperheille. Omaisuuden keräämisen ja hyödyntämisen strategiat myös muuttuvat hyvinvoinnin kasvaessa ja niihin vaikuttavat monet ulkoiset tekijät. Ympäristön ja köyhyyden suhde on siis edelleen epäselvä. Köyhyyden voittaminen vaatii pitkällä tähtäimellä sitä, että viljelijäperheet nousisivat investointiköyhyyden rajan yläpuolelle. Näin heillä olisi varaa alkaa kartuttaa omaisuutta ja investoida kestävämpään maankäyttöön. Tällä hetkellä kuitenkin isolle osalle herreralaisia perheitä tuo raja on kaukana tavoittamattomissa. Miten päästä yli tuhannen dollarin kulutukseen perheenjäsentä kohden, mikäli elintaso ei yllä edes riittävään ravitsemukseen? Ja sittenkin, vaikka hyvinvointi kohenisi, ei ympäristön kannalta parannuksia ole välttämättä odotettavissa, mikäli karjalaumat kasvavat ja eroosioalttiit laitumet leviävät.

Tukien tuotannosta irrottamisen vaikutukset viljan, naudanlihan ja sianlihan tarjontaan Suomessa

This research discusses decoupling CAP (Common Agricultural Policy) support and impacts which may occur on grain cultivation area and supply of beef and pork in Finland. The study presents the definitions and studies on decoupled agricultural subsidies, the development of supply of grain, beef and pork in Finland and changes in leading factors affecting supply between 1970 and 2005. Decoupling agricultural subsidies means that the linkage between subsidies and production levels is disconnected; subsidies do not affect the amount produced. The hypothesis is that decoupling will decrease the amounts produced in agriculture substantially. In the supply research, the econometric models which represent supply of agricultural products are estimated based on the data of prices and amounts produced. With estimated supply models, the impacts of changes in prices and public policies, can be forecasted according to supply of agricultural products. In this study, three regression models describing combined cultivation areas of rye, wheat, oats and barley, and the supply of beef and pork are estimated. Grain cultivation area and supply of beef are estimated based on data from 1970 to 2005 and supply of pork on data from 1995 to 2005. The dependencies in the model are postulated to be linear. The explanatory variables in the grain model were average return per hectare, agricultural subsidies, grain cultivation area in the previous year and the cost of fertilization. The explanatory variables in the beef model were the total return from markets and subsidies and the amount of beef production in the previous year. In the pork model the explanatory variables were the total return, the price of piglet, investment subsidies, trend of increasing productivity and the dummy variable of the last quarter of the year. The R-squared of model of grain cultivation area was 0,81, the model of beef supply 0,77 and the model of pork supply 0,82. Development of grain cultivation area and supply of beef and pork was estimated for 2006 - 2013 with this regression model. In the basic scenario, development of explanatory variables in 2006 - 2013 was postulated to be the same as they used to be in average in 1995 - 2005. After the basic scenario the impacts of decoupling CAP subsidies and domestic subsidies on cultivation area and supply were simulated. According to the results of the decoupling CAP subsidies scenario, grain cultivation area decreases from 1,12 million hectares in 2005 to 1,0 million hectares in 2013 and supply of beef from 88,8 million kilos in 2005 to 67,7 million kilos in 2013. Decoupling domestic and investment subsidies will decrease the supply of pork from 194 million kilos in 2005 to 187 million kilos in 2006. By 2013 the supply of pork grows into 203 million kilos.

The Politics of Pulp Investment and the Brazilian Landless Movement (MST)

The Politics of Pulp Investment and the Brazilian Landless Movement (MST) The paper industry has been moving more heavily to the global South at the beginning of the 21st century. In a number of cases the rural populations of the global South have engaged in increasingly important resistance in their scuffle with the large-scale tree plantation-relying pulp investment model. The resistance had generally not yet managed to slow down Southern industrial tree plantation expansion until 2004. After all, even the MST, perhaps the strongest of the Southern movements, has limited power in comparison to the corporations pushing for plantation expansion. This thesis shows how, even against these odds, depending on the mechanisms of contention and case-specific conflict dynamics, in some cases the movements have managed to slow and even reverse plantation expansion. The thesis is based on extensive field research in the Brazilian countryside. It outlines a new theory of contentious agency promotion, emphasizing its importance in the shaping of corporate resource exploitation. The thesis includes a Qualitative Comparative Analysis of resistance influence on the economic outcomes of all (14) Brazilian large-scale pulp projects between 2004-2008. The central hypothesis of the thesis is that corporate resource exploitation can be slowed down more effectively and likely when the resistance is based on contentious agency. Contentious agency is created by the concatenation of five mutually supporting mechanisms of contention: organizing and politicizing a social movement; heterodox framing of pulp projects; protesting; networking; and embedding whilst maintaining autonomy. The findings suggest that contentious agency can slow or even reverse the expansion of industrial plantations, whereas when contentious agency promotion was inactive, fast or even unchecked plantation expansion was always the outcome. The rule applied to all the assessed 14 pulp conflict cases. The hypothesis gained strong support even in situations where corporate agency promotion was simultaneously active. In previous studies on social movements, there has been a lack of contributions that help us understand the causal mechanisms of contention influencing economic outcomes. The thesis answers to the call by merging a Polanyian analysis of the political economy with the Dynamics of Contention research program and making a case for the impact of contentious agency on capital accumulation. The research concludes that an efficient social movement can utilize mechanisms of contention to promote the potential of activism among its members and influence investment outcomes. Protesting, for example via pioneering land occupations, seemed to be particularly important. Until now, there has been no comprehensive theory on when and how contentious agency can slow down or reverse the expansion of corporate resource exploitation. The original contribution of this research is to provide such a theory, and utilize it to offer an extensive explanation on the conflicts over pulp investment in Brazil, the globalization of the paper industry, and slowing of industrial plantation expansion in the global South.

Primary total hip arthroplasty for primary osteoarthritis in Finland : A national register based analysis

The first aim of the current study was to evaluate the survival of total hip arthroplasty (THA) in patients aged 55 years and older on a nation-wide level. The second aim was to evaluate, on a nation wide-basis, the geographical variation of the incidence of primary THA for primary OA and also to identify those variables that are possibly associated with this variation. The third aim was to evaluate the effects of hospital volume: on the length of stay, on the numbers of re-admissions and on the numbers of complications of THR on population-based level in Finland. The survival of implants was analysed based on data from the Finnish Arthroplasty Register. The incidence and hospital volume data were obtained from the Hospital Discharge Register. Cementless total hip replacements had a significantly reduced risk of revision for aseptic loosening compared with cemented hip replacements. When revision for any reason was the end point in the survival analyses, there were no significant differences found between the groups. Adjusted incidence ratios of THA varied from 1.9- to 3.0-fold during the study period. Neither the average income within a region nor the morbidity index was associated with the incidence of THA. For the four categories of volume of total hip replacements performed per hospital, the length of the surgical treatment period was shorter for the highest volume group than for the lowest volume group. The odds ratio for dislocations was significantly lower in the high volume group than in the low volume group. In patients who were 55 years of age or older, the survival of cementless total hip replacements was as good as that of the cemented replacements. However, multiple wear-related revisions of the cementless cups indicate that excessive polyethylene wear was a major clinical problem with modular cementless cups. The variation in the long-term rates of survival for different cemented stems was considerable. Cementless proximal porous-coated stems were found to be a good option for elderly patients. When hip surgery was performed on with a large repertoire, the indications to perform THAs due to primary OA were tight. Socio-economic status of the patient had no apparent effect on THA rate. Specialization of hip replacements in high volume hospitals should reduce costs by significantly shortening the length of stay, and may reduce the dislocation rate.

Total hip arthroplasty in young patients : with special references to patients under 55 years of age and to patients with developmental dysplasia of the hip

There is an ongoing controversy as to which methods in total hip arthroplasty (THA) could provide young patients with best long-term results. THA is an especially demanding operation in patients with severely dysplastic hips. The optimal surgical treatment for these patients also remains controversial. The aim of this study was to evaluate the long-term survival of THA in young patients (<55 years at the time of the primary operation) on a nation-wide level, and to analyze the long-term clinical and radio-graphical outcome of uncemented THA in patients with severely dysplastic joints. Survival of 4661 primary THAs performed for primary osteoarthritis (OA), 2557 primary THAs per-formed for rheumatoid arthritis (RA), and modern uncemented THA designs performed for primary OA in young patients, were analysed from the Finnish Arthroplasty Register. A total of 68 THAs were per-formed in 56 consecutive patients with high congenital hip dislocation between 1989-1994, and 68 THAs were performed in 59 consecutive patients with severely dysplastic hips and a previous Schanz osteotomy of the femur between 1988-1995 at the Orton Orthopaedic Hospital, Helsinki, Finland. These patients underwent a detailed physical and radiographical evaluation at a mean of 12.3 years and 13.0 years postoperatively, respectively. The risk of stem revision due to aseptic loosening in young patients with primary OA was higher for cemented stems than for proximally porous-coated or HA-coated uncemented stems implanted over the 1991-2001 period. There was no difference in the risk of revision between all-poly cemented-cups and press-fit porous-coated uncemented cups implanted during the same period, when the end point was defined as any revision (including exchange of liner). All uncemented stem designs studied in young patients with primary OA had >90% survival rates at 10 years. The Biomet Bi-Metric stem had a 95% (95% CI 93-97) survival rate even at 15 years. When the end point was defined as any revision, 10 year survival rates of all uncemented cup designs except the Harris-Galante II decreased to <80%. In young patients with RA, the risk of stem revision due to aseptic loosening was higher with cemented stems than with proximally porous-coated uncemented stems. In contrast, the risk of cup revision was higher for all uncemented cup concepts than for all-poly cemented cups with any type of cup revision as the end point. The Harris hip score increased significantly (p<0.001) both in patients with high con-genital hip dislocation and in patients with severely dysplastic hips and a previous Schanz osteotomy, treated with uncemented THA. There was a negative Trendelenburg sign in 92% and in 88% of hips, respectively. There were 12 (18%) and 15 (22%) perioperative complications. The rate of survival for the CDH femoral components, with revision due to aseptic loosening as the end point, was 98% (95% CI 97-100) at 10 years in patients with high hip dislocation and 92% (95% CI, 86-99) at 14 years in patients with a previous Schanz osteotomy. The rate of survival for press-fit, porous-coated acetabular components, with revision due to aseptic loosening as the end point, was 95% (95% CI 89-100) at 10 years in patients with high hip dislocation, and 98% (95% CI 89-100) in patients with a previous Schanz osteotomy. When revision of the cup for any reason was defined as the end point, 10 year sur-vival rates declined to 88% (95% CI 81-95) and to 69% (95% CI, 56-82), respectively. For young patients with primary OA, uncemented proximally circumferentially porous- and HA-coated stems are the implants of choice. However, survival rates of modern uncemented cups are no better than that of all-poly cemented cups. Uncemented proximally circumferentially porous-coated stems and cemented all-poly cups are currently the implants of choice for young patients with RA. Uncemented THA, with placement of the cup at the level of the true acetabulum, distal advancement of the greater trochanter and femoral shortening osteotomy provided patients with high congenital hip dislocation good long-term outcomes. Most of the patients with severely dysplastic hips and a previous Schanz osteotomy can be successfully treated with the same method. However, the subtrochanteric segmental shortening with angular correction gives better leg length correction for the patients with a previous low-seated unilateral Schanz osteotomy.

Total Hip and Knee Arthoplasty for Osteoarthritis : Factors Related to the Early Outcome of Surgery

Some perioperative clinical factors related to the primary cemented arthroplasty operation for osteoarthritis of the hip or knee joint are studied and discussed in this thesis. In a randomized, double-blind study, 39 patients were divided into two groups: one receiving tranexamic acid and the other not receiving it. Tranexamic acid was given in a dose of 10 mg/kg before the operation and twice thereafter, at 8-hour intervals. Total blood loss was smaller in the tranexamic acid group than in the control group. No thromboembolic complications were noticed. In a prospective, randomized study, 58 patients with hip arthroplasty and 39 patients with knee arthroplasty were divided into groups with postoperative closed-suction drainage and without drainage. There was no difference in healing of the wounds, postoperative blood transfusions, complications or range of motion. As a result of this study, the use of drains is no longer recommended. In a randomised study the effectiveness of a femoral nerve block (25 patients) was compared with other methods of pain control (24 patients) on the first postoperative day after total knee arthroplasty. The femoral block consisted of a single injection administered at patients´ bedside during the surgeon´s hospital rounds. Femoral block patients reported less pain and required half of the amount of oxycodone. Additional femoral block or continued epidural analgesia was required more frequently by the control group patients. Pain management with femoral blocks resulted in less work for nursing staff. In a retrospective study of 422 total hip and knee arthroplasty cases the C-reactive protein levels and clinical course were examined. After hip and knee arthroplasty the maximal C-reactive protein values are seen on the second and third postoperative days, after which the level decreases rapidly. There is no difference between patients with cemented or uncemented prostheses. Major postoperative complications may cause a further increase in C-reactive protein levels at one and two weeks. In-hospital and outpatient postoperative control radiographs of 200 hip and knee arthroplasties were reviewed retrospectively. If postoperative radiographs are of good quality, there seems to be no need for early repetitive radiographs. The quality and safety of follow-up is not compromised by limiting follow-up radiographs to those with clinical indications. Exposure of the patients and the staff to radiation is reduced. Reading of the radiographs by only the treating orthopaedic surgeon is enough. These factors may seem separate from each other, but linking them together may help the treating orthopaedic surgeon to adequate patient care strategy. Notable savings can be achieved.

Diffraction and Total Cross-Section at the Tevatron and the LHC

At the Tevatron, the total p_bar-p cross-section has been measured by CDF at 546 GeV and 1.8 TeV, and by E710/E811 at 1.8 TeV. The two results at 1.8 TeV disagree by 2.6 standard deviations, introducing big uncertainties into extrapolations to higher energies. At the LHC, the TOTEM collaboration is preparing to resolve the ambiguity by measuring the total p-p cross-section with a precision of about 1 %. Like at the Tevatron experiments, the luminosity-independent method based on the Optical Theorem will be used. The Tevatron experiments have also performed a vast range of studies about soft and hard diffractive events, partly with antiproton tagging by Roman Pots, partly with rapidity gap tagging. At the LHC, the combined CMS/TOTEM experiments will carry out their diffractive programme with an unprecedented rapidity coverage and Roman Pot spectrometers on both sides of the interaction point. The physics menu comprises detailed studies of soft diffractive differential cross-sections, diffractive structure functions, rapidity gap survival and exclusive central production by Double Pomeron Exchange.

Discursive (de)legitimation of a contested Finnish greenfield investment project in Latin America

Despite the central role of legitimacy in corporate social responsibility debate, little is known of subtle meaning-making processes through which social actors attempt to establish or de-establish legitimacy for socially contested corporate undertakings, and through which they, at the same time, struggle to define the proper social role and responsibility of corporations. We investigated these processes in the context of the intense socio-political conflict around the Finnish forest industry company Metsa¨-Botnia’s world-scale pulp mill in Uruguay. A critical discursive analysis of Finnish media texts highlights three types of struggle that characterized the media coverage: legalistic argumentation, truth fights, and political battles. Interestingly, this case illustrates how the corporate representatives — with the help of the national media — tend to frame the issue in legalistic terms, emphasize their expert knowledge in technical and environmental evaluations, and distance themselves from political disputes. We argue that similar tendencies are likely to characterize corporate social responsibility debates more generally.

Growth and Convergence: The case of China

Growth and Convergence: The Case of China Since the initiation of economic reforms in 1978, China has become one of the world’s fast-growing economies. The rapid growth, however, has not been shared equally across the different regions in China. The prominent feature of substantial differences in incomes and growth rates across the different Chinese regions has attracted the attention of many researchers. This book focuses on issues related to economic growth and convergence across the Chinese regions over the past three decades. The book has eight chapters. Apart from an introduction chapter and a concluding chapter, all the other chapters each deal with some certain aspects of the central issue of regional growth and convergence across China over the past three decades. The whole book is organized as follows. Chapter 1 provides an introduction to the basic issues involved in this book. Chapter 2 tests economic growth and convergence across 31 Chinese provinces during 1981-2005, based on the theoretical framework of the Solow growth model. Chapter 3 investigates the relationship between openness to foreign economic activities, such as foreign trade and foreign direct investment, and the regional economic growth in the case of China during 1981-2005. Chapter 4, based on data of 31 Chinese provinces over the period 1980-2004, presents new evidence on the effects of structural shocks and structural transformation on growth and convergence among the Chinese regions. Chapter 5, by building up an empirical model that takes account of different potential effects of foreign direct investment, focuses on the impacts of foreign direct investment on China’s regional economic performance and growth. Chapter 6 reconsiders the growth and convergence problem of the Chinese regions in an alternative theoretical framework with endogenous saving behavior and capital mobility across regions. Chapter 7, by building up a theoretical model concerning comparative advantage and transaction efficiency, focuses on one of the potential mechanisms through which China achieves its fast economic growth over the past few decades. Chapter 8 concludes the book by summarizing the results from the previous chapters and suggesting directions for further studies.

Essays on the Linkages Between Financial Markets, and Risk Asymmetries (summary section only)

During the last few decades there have been far going financial market deregulation, technical development, advances in information technology, and standardization of legislation between countries. As a result, one can expect that financial markets have grown more interlinked. The proper understanding of the cross-market linkages has implications for investment and risk management, diversification, asset pricing, and regulation. The purpose of this research is to assess the degree of price, return, and volatility linkages between both geographic markets and asset categories within one country, Finland. Another purpose is to analyze risk asymmetries, i.e., the tendency of equity risk to be higher after negative events than after positive events of equal magnitude. The analysis is conducted both with respect to total risk (volatility), and systematic risk (beta). The thesis consists of an introductory part and four essays. The first essay studies to which extent international stock prices comove. The degree of comovements is low, indicating benefits from international diversification. The second essay examines the degree to which the Finnish market is linked to the “world market”. The total risk is divided into two parts, one relating to world factors, and one relating to domestic factors. The impact of world factors has increased over time. After 1993, when foreign investors were allowed to freely invest in Finnish assets, the risk level has been higher than previously. This was also the case during the economic recession in the beginning of the 1990’s. The third essay focuses on the stock, bond, and money markets in Finland. According to a trading model, the degree of volatility linkages should be strong. However, the results contradict this. The linkages are surprisingly weak, even negative. The stock market is the most independent, while the money market is affected by events on the two other markets. The fourth essay concentrates on volatility and beta asymmetries. Contrary to many international studies there are only few cases of risk asymmetries. When they occur, they tend to be driven by the market-wide component rather than the portfolio specific element.