Foreign Capital and Finland : Central government's first period of reliance on international financial markets, 1862-1938

The main objective of the study is to evaluate the Finnish central government s foreign borrowing between the years 1862 and 1938. Most of this period was characterised by deep capital market integration that bears resemblance to the liberal world financial order at the turn of the millennium. The main aim is to analyse the credit risk associated with the state and its determination by evaluating the world financial market centres perception of Finland. By doing this, the study is also expected to provide an additional dimension to Finland s political and economic history by incorporating into the research the assessments of international capital markets regarding Finland during a period that witnessed profound political and economic changes in Finnish society. The evaluation of the credit risk mainly relies on exchange-rate risk free time series of the state s foreign bonds. They have been collected from quotations in the stock exchanges in Helsinki, Hamburg, Paris and London. In addition, it investigates Finland s exposure to short-term debt and Moody s credit ratings assigned to Finland. The study emphasises the importance of the political risk. It suggests that the hey-day of the state s reliance on foreign capital markets took place during last few decades of the 19th century when Finland enjoyed a wide autonomy in the Russian Empire and prudently managed its economy, highlighted in Finland s adherence to the international gold standard. Political confrontations in Finland and, in particular, in Russia and the turbulence of the world financial system prevented the return of this beneficial position again. Through its issuance of foreign bonds the state was able to import substantial amounts of foreign capital, which was sorely needed to foster economic development in Finland. Moreover, the study argues that the state s presence in the western capital markets not only had economic benefits, but it also increased the international awareness of Finland s distinct and separate status in the Russian Empire and later underlined its position as an independent republic.

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.

World Wide Web korpuksena kielitieteellisen tutkimusaineiston haku verkkosivuilta

Tämä tutkielma käsittelee World Wide Webin sisältämien verkkosivujen sisältöjen käyttöä korpusmaisesti kielitieteellisenä tutkimusaineistona. World Wide Web sisältää moninkertaisesti enemmän tekstiä kuin suurimmat olemassa olevat perinteiset tekstikorpukset, joten verkkosivuilta voi todennäköisesti löytää paljon esiintymiä sellaisista sanoista ja rakenteista, jotka ovat perinteisissä korpuksissa harvinaisia. Verkkosivuja voidaan käyttää aineistona kahdella eri tavalla: voidaan kerätä satunnainen otos verkkosivuista ja luoda itsenäinen korpus niiden sisällöistä, tai käyttää koko World Wide Webiä korpuksena verkkohakukoneiden kautta. Verkkosivuja on käytetty tutkimusaineistona monilla eri kielitieteen aloilla, kuten leksikograafisessa tutkimuksessa, syntaktisten rakenteiden tutkimuksessa, pedagogisena materiaalina ja vähemmistökielten tutkimuksessa. Verkkosivuilla on perinteisiin korpuksiin verrattuna useita haitallisia ominaisuuksia, jotka pitää ottaa huomioon, kun niitä käytetään aineistona. Kaikki sivut eivät sisällä kelvollista tekstiä, ja sivut ovat usein esimerkiksi HTML-muotoisia, jolloin ne pitää muuttaa helpommin käsiteltävissä olevaan muotoon. Verkkosivut sisältävät enemmän kielellisiä virheitä kuin perinteiset korpukset, ja niiden tekstityypit ja aihepiirit ovat runsaslukuisempia kuin perinteisten korpusten. Aineiston keräämiseen verkkosivuilta tarvitaan tehokkaita ohjelmatyökaluja. Näistä yleisimpiä ovat kaupalliset verkkohakukoneet, joiden kautta on mahdollista päästä nopeasti käsiksi suureen määrään erilaisia sivuja. Näiden lisäksi voidaan käyttää erityisesti kielitieteellisiin tarpeisiin kehitettyjä työkaluja. Tässä tutkielmassa esitellään ohjelmatyökalut WebCorp, WebAsCorpus.org, BootCaT ja Web as Corpus Toolkit, joiden avulla voi hakea aineistoa verkkosivuilta nimenomaan kielitieteellisiin tarkoituksiin.

Ryhmäidentiteetin mittaaminen verkkoroolipelissä World of Warcraft

The objective of the study was to explore the dimensions of group identity in the guilds of World of Warcraft. Previous research shows that social interaction has an important role in playing games for many players. Social identities are an important aspect of self-concept and since group related cues are more salient than personal clues in computer-mediated communication, the social gaming experience was approached through group identity. In the study a new scale will be developed to measure the group identity in games. Secondary goal is to study how different guild attributes affect the group identity and third goal is to explore the connection between group identity and gaming experience and amount of play. Subjects were 1203 guild members and 106 players not in a guild. The data was gathered by an Internet survey which measured group identity with nine scales, gaming experience with three scales and guild attributes with four scales. Also various background data was gathered. The construct of group identity was analyzed with explorative factor analysis. The typical experiences of group identity was analyzed with cluster analysis and effects of guild attributes with multivariate analysis of covariance. As a result of the study a new scale was developed which measured group identity on six dimensions: self-stereotyping, public and private evaluation, importance, interconnection of self and others and awareness of content. Group identity was experienced strongest in elder middle-sized guilds that had formal rules and that emphasized social interaction. The players with strong group identity had more positive gaming experience and played World of Warcraft more per week than the players who were not in a guild or identified to guild weakly. This result encourages game developers to produce environments that enhance group identity as it seems to increase the enjoyment in games. As a whole this study proposes that group identity in guilds is constructed from the same elements as in traditional groups. If this is truly the case, guild membership may have similar positive effects on individual’s mental well-being as traditional positively evaluated group memberships have.

Tiedonhakustrategiat World Wide Webissä

Tutkimuksen tarkoituksena on selvittää, millaisia tiedonhakustrategioita tiedonhakijatkäyttävät etsiessään tietoa Internetistä. Käyttäjät luokitellaan kolmeen ryhmään tiedonhakustrategiansa mukaan. Haku-suuntautuneet käyttäjät käyttävät enimmäkseen hakukoneita, niin koko Internetin kattavia kuin sivustojen sisäisiäkin. Linkkisuuntautuneet taas joko tietävät tai arvaavat kohdesivuston osoitteen tai käyttävät laajoja hierarkkisia hakemistoja tiedon löytämiseen. He navigoivat mielummin sivustollakin linkkejä käyttäen eivätkä yleensä käytä hakutoimintoa. Eriytyneet käyttäjät eivät säännönmukaisesti suosi kumpaakaan tapaa, vaan valitsevat strategian tehtävän mukaan. Tietoa kerättiin kahdella tavalla: WWW-sivulla olleella kyselylomakkeella ja tiedonhakutestillä, jossa käyttäjille annettiin suoritettavaksi erilaisia tiedonhakutehtäviä. Tiedonhakutehtävät lajiteltiin kolmeen ryhmään sen mukaan, mitä strategiaa ne suosivat: hakustrategiaa suosivat, linkkistrategiaa suosivat ja neutraalit tehtävät. Tutkimusongelmana oli selvittää, kuinka tehtävän tyyppi ja ATK- ja Internet-kokemus vaikuttavat tiedonhakustrategian valintaan. Kävi ilmi, ettei käyttäjien suuntautuneisuus tiettyyn strategiaan vaikuta tiedonhakustrategian valintaan, vaan ainoastaan tehtävän tyyppi oli merkitsevä tekijä. Aikaisemman tutkimustiedon valossa kokeenet suosivat haku-suuntautunutta strategiaa. Tässä tutkimuksessa havaittiin, että kokemus lisäsi molempien strategioiden käyttöä yhtäläisesti, mutta tämä ilmiö oli havaittavissa ainoastaan kysely-lomakkeen pohjalta, ei testeissä. Molempien tiedonhakustrategioiden käyttö lisääntyy kokemuksen myötä, mutta suhteelliset osuudet pysyvät samoina. Syyksi sille, että kokeneet eivät suosineet hakustrategiaa, esitetään sitä, että tehtävät olivat liian helppoja, jolloin kokemus ei pääse auttamaan. Oleellisia eroja suoritusajoissa tai hakustrategian vaihdon tiheydessä ei havaittu suhteessa kokemukseen, ainoastaan suhteessa tehtävän tyyppiin.Tämäkin selitettiin toisentyyppisten tehtävien helppoudella. Tutkimuksessa pohditaan lisäksi asiantuntijuuden syntyä tiedonhakukontekstissa sekä esitetään metatietohypoteesi, jonka mukaan tiedonhakustrategian valintaan vaikuttaa tärkeänä tekijänä käyttäjän metatieto hakupalveluista. Metatietoon kuuluu tieto siitä, mitä hakukoneita on saatavilla, mitä tietoa verkosta kannattaa hakea, millä yrityksillä ja yhteisöillä on sisältörikkaat sivut jne, ja minkä tyyppistä tietoa yleensä on saatavilla. Kaikenkaikkiaan strategian valintaan esitetään taustalle kolmen tason tiedon vaikutusta: 1) oma asiantuntemus haettavasta alasta, 2) metatieto Internetin tiedonhakupalveluista sekä 3) tekninen tieto siitä, kuinka hakukoneet toimivat. Avainsanat: tiedonhaku, tiedonhakustrategia, hakukone, WWW, metatieto, kognitiivinen psykologia

Agroforestry systems for sustainable livelihoods and improved land management in the East Usambara Mountains, Tanzania

Forest destruction for agriculture continues to be a major threat to the rich biological diversity in the East Usambara Mountains in the north-eastern corner of Tanzania. The highest ratio of endemic plant and animal species found on 100 km2 anywhere in the world is depending on the remaining natural forests. Forests are vitally important for the local population in many different ways, and nationally they are an important source of water and hydroelectricity. The soils, of low fertility and mostly acidic Ferrasols, mainly have the nutrients in the topsoil. After clear-cutting, the soils soon become poor when the topsoil is eroded. High-value cardamom is nowadays unsustainably cultivated in the natural forests of the East Usambaras. The general aim was to study the possibilities to develop new profitable and sustainable agroforestry systems for the benefit of the local people that could contribute to relieving the pressure on the remaining natural forests in the East Usambara Mountains. Results from a spice crop agroforestry trial, established in cooperation with a local farmer, showed a clear advantage of intercropping cardamom (Elettaria cardamomum) and black pepper (Piper nigrum) with trees, especially with Grevillea robusta. The nitrogen fixing tree species Gliricidia sepium also improved the nitrogen and organic matter content of the soil over levels found in the natural forest. With improved agroforestry methods for spice production the households generated as much as13 times the net income obtained with traditional forest cultivation practices. There are thus sustainable and profitable ways to cultivate spices as cash crops in well-managed homegardens. However, the farmers need stable markets, access to credit and comprehensive extension services. The soil fertility depletion should be reversed with organic manure application and an enabling policy environment for the smallholder-farming sector. Strong farmers organisations and equal rights to resources and decision-making are needed. Organic spices have an increasing demand, and their export would be profitable for these farmers. What is, however, most needed for a change is a political will of a government that understands the importance of agricultural and forestry development for poverty reduction.

Aikakauslehtipapereiden pitkän aikavälin kulutus Yhdysvalloissa

The United States is the world s single biggest market area, where the demand for graphic papers has increased by 80 % during the last three decades. However, during the last two decades there have been very big unpredictable changes in the graphic paper markets. For example, the consumption of newsprint started to decline from the late 1980 s, which was surprising compared to the historical consumption and projections. The consumption has declined since. The aim of this study was to see how magazine paper consumption will develop in the United States until 2030. The long-term consumption projection was made using mainly two methods. The first method was to use trend analysis to see how and if the consumption has changed since 1980. The second method was to use qualitative estimate. These estimates are then compared to the so-called classical model projections, which are usually mentioned and used in forestry literature. The purpose of the qualitative analysis is to study magazine paper end-use purposes and to analyze how and with what intensity the changes in society will effect to magazine paper consumption in the long-term. The framework of this study covers theories such as technology adaptation, electronic substitution, electronic publishing and Porter s threat of substitution. Because this study deals with markets, which have showed signs of structural change, a very substantial part of this study covers recent development and newest possible studies and statistics. The following were among the key findings of this study. Different end-uses have very different kinds of future. Electronic substitution is very likely in some end-use purposes, but not in all. Young people i.e. future consumers have very different manners, habits and technological opportunities than our parents did. These will have substantial effects in magazine paper consumption in the long-term. This study concludes to the fact that the change in magazine paper consumption is more likely to be gradual (evolutionary) than sudden collapse (revolutionary). It is also probable that the years of fast growing consumption of magazine papers are behind. Besides the decelerated growth, the consumption of magazine papers will decline slowly in the long-term. The decline will be faster depending on how far in the future we ll extend the study to.

Debunking Weak Sustainable Consumption : Towards Strong Sustainable Consumption Governance

Achieving sustainable consumption patterns is a crucial step on the way towards sustainability. The scientific knowledge used to decide which priorities to set and how to enforce them has to converge with societal, political, and economic initiatives on various levels: from individual household decision-making to agreements and commitments in global policy processes. The aim of this thesis is to draw a comprehensive and systematic picture of sustainable consumption and to do this it develops the concept of Strong Sustainable Consumption Governance. In this concept, consumption is understood as resource consumption. This includes consumption by industries, public consumption, and household consumption. Next to the availability of resources (including the available sink capacity of the ecosystem) and their use and distribution among the Earth’s population, the thesis also considers their contribution to human well-being. This implies giving specific attention to the levels and patterns of consumption. Methods: The thesis introduces the terminology and various concepts of Sustainable Consumption and of Governance. It briefly elaborates on the methodology of Critical Realism and its potential for analysing Sustainable Consumption. It describes the various methods on which the research is based and sets out the political implications a governance approach towards Strong Sustainable Consumption may have. Two models are developed: one for the assessment of the environmental relevance of consumption activities, another to identify the influences of globalisation on the determinants of consumption opportunities. Results: One of the major challenges for Strong Sustainable Consumption is that it is not in line with the current political mainstream: that is, the belief that economic growth can cure all our problems. So, the proponents have to battle against a strong headwind. Their motivation however is the conviction that there is no alternative. Efforts have to be taken on multiple levels by multiple actors. And all of them are needed as they constitute the individual strings that together make up the rope. However, everyone must ensure that they are pulling in the same direction. It might be useful to apply a carrot and stick strategy to stimulate public debate. The stick in this case is to create a sense of urgency. The carrot would be to articulate better the message to the public that a shrinking of the economy is not as much of a disaster as mainstream economics tends to suggest. In parallel to this it is necessary to demand that governments take responsibility for governance. The dominant strategy is still information provision. But there is ample evidence that hard policies like regulatory instruments and economic instruments are most effective. As for Civil Society Organizations it is recommended that they overcome the habit of promoting Sustainable (in fact green) Consumption by using marketing strategies and instead foster public debate in values and well-being. This includes appreciating the potential of social innovation. A countless number of such initiatives are on the way but their potential is still insufficiently explored. Beyond the question of how to multiply such approaches, it is also necessary to establish political macro structures to foster them.

Livelihood, land use and environment interactions in the highlands of East Africa

This study aims at improving understanding of the interactions of livelihoods and the environment focusing on both socio-economic and biodiversity implications of land use change in the context of population pressure, global and local markets, climate change, cultural and regional historical factors in the highlands of East Africa. The study is based on three components (1) two extensive livelihood surveys, one on Mt. Kilimanjaro in Tanzania and the other in the Taita Hills of Kenya, (2) a land use change study of the southern slopes of Mt. Kilimanjaro focusing on land use trends between 1960s and 1980s and 1980s and 2000 and (3) a bird diversity study focusing on the potential impacts of the future land use change on birds in the main land use types on the slopes and the adjacent plains of Mt. Kilimanjaro. In addition, information on the highlands in Embu and the adjacent lowlands in Mbeere of Kenya are added to the discussion. Some general patterns of livelihood, land use and environment interactions can be found in the three sites. However, the linkages are very complex. Various external factors at different times in history have influenced most of the major turning points. Farmers continually make small adaptations to their farming practices, but the locally conceived alternatives are too few. Farmers lack specific information and knowledge on the most suitable crops, market opportunities and the quality requirements for growing the crops for markets. Population growth emerges as the most forceful driver of land use and environmental change. The higher altitudes have become extremely crowded with population densities in some areas higher than typical urban population densities. Natural vegetation has almost totally been replaced by farmland. Decreasing farm size due to population pressure is currently threatening the viability of whole farming systems. In addition, capital-poor intensification has lead to soil fertility depletion. Agricultural expansion to the agriculturally marginal lowlands has created a new and distinct group of farmers struggling constantly with climate variability causing frequent crop failures. Extensification to the fragile drylands is the major cause of fragmentation and loss of wildlife habitat. The linkages between livelihoods, land use and the environment generally point to degradation of the environment leading to reduced environmental services and ecosystem functions. There is no indication that the system is self-regulating in this respect. Positive interventions will be needed to maintain ecosystem integrity.

Mathematical Aspects of Financial Markets with Frictions

Frictions are factors that hinder trading of securities in financial markets. Typical frictions include limited market depth, transaction costs, lack of infinite divisibility of securities, and taxes. Conventional models used in mathematical finance often gloss over these issues, which affect almost all financial markets, by arguing that the impact of frictions is negligible and, consequently, the frictionless models are valid approximations. This dissertation consists of three research papers, which are related to the study of the validity of such approximations in two distinct modeling problems. Models of price dynamics that are based on diffusion processes, i.e., continuous strong Markov processes, are widely used in the frictionless scenario. The first paper establishes that diffusion models can indeed be understood as approximations of price dynamics in markets with frictions. This is achieved by introducing an agent-based model of a financial market where finitely many agents trade a financial security, the price of which evolves according to price impacts generated by trades. It is shown that, if the number of agents is large, then under certain assumptions the price process of security, which is a pure-jump process, can be approximated by a one-dimensional diffusion process. In a slightly extended model, in which agents may exhibit herd behavior, the approximating diffusion model turns out to be a stochastic volatility model. Finally, it is shown that when agents' tendency to herd is strong, logarithmic returns in the approximating stochastic volatility model are heavy-tailed. The remaining papers are related to no-arbitrage criteria and superhedging in continuous-time option pricing models under small-transaction-cost asymptotics. Guasoni, Rásonyi, and Schachermayer have recently shown that, in such a setting, any financial security admits no arbitrage opportunities and there exist no feasible superhedging strategies for European call and put options written on it, as long as its price process is continuous and has the so-called conditional full support (CFS) property. Motivated by this result, CFS is established for certain stochastic integrals and a subclass of Brownian semistationary processes in the two papers. As a consequence, a wide range of possibly non-Markovian local and stochastic volatility models have the CFS property.

Ethics in a Technological World : Framing the Questions and Three Approaches

This study addresses the following question: How to think about ethics in a technological world? The question is treated first thematically by framing central issues in the relationship between ethics and technology. This relationship has three distinct facets: i) technological advance poses new challenges for ethics, ii) traditional ethics may become poorly applicable in a technologically transformed world, and iii) the progress in science and technology has altered the concept of rationality in ways that undermine ethical thinking itself. The thematic treatment is followed by the description and analysis of three approaches to the questions framed. First, Hans Jonas s thinking on the ontology of life and the imperative of responsibility is studied. In Jonas s analysis modern culture is found to be nihilistic because it is unable to understand organic life, to find meaning in reality, and to justify morals. At the root of nihilism Jonas finds dualism, the traditional Western way of seeing consciousness as radically separate from the material world. Jonas attempts to create a metaphysical grounding for an ethic that would take the technologically increased human powers into account and make the responsibility for future generations meaningful and justified. The second approach is Albert Borgmann s philosophy of technology that mainly assesses the ways in which technological development has affected everyday life. Borgmann admits that modern technology has liberated humans from toil, disease, danger, and sickness. Furthermore, liberal democracy, possibilities for self-realization, and many of the freedoms we now enjoy would not be possible on a large scale without technology. Borgmann, however, argues that modern technology in itself does not provide a whole and meaningful life. In fact, technological conditions are often detrimental to the good life. Integrity in life, according to him, is to be sought among things and practices that evade technoscientific objectification and commodification. Larry Hickman s Deweyan philosophy of technology is the third approach under scrutiny. Central in Hickman s thinking is a broad definition of technology that is nearly equal to Deweyan inquiry. Inquiry refers to the reflective and experiential way humans adapt to their environment by modifying their habits and beliefs. In Hickman s work, technology consists of all kinds of activities that through experimentation and/or reflection aim at improving human techniques and habits. Thus, in addition to research and development, many arts and political reforms are technological for Hickman. He argues for recasting such distinctions as fact/value, poiesis/praxis/theoria, and individual/society. Finally, Hickman does not admit a categorical difference between ethics and technology: moral values and norms need to be submitted to experiential inquiry as well as all the other notions. This study mainly argues for an interdisciplinary approach to the ethics of technology. This approach should make use of the potentialities of the research traditions in applied ethics, the philosophy of technology, and the social studies on science and technology and attempt to overcome their limitations. This study also advocates an endorsement of mid-level ethics that concentrate on the practices, institutions, and policies of temporal human life. Mid-level describes the realm between the instantaneous and individualistic micro-level and the universal and global macro level.

State Agent, Identity and the "New World Order" : Reconstructing Polish Defence Identity after the Cold War Era

National identity signifies and makes state s defence- and foreign policy behaviour meaningful. National consciousness is narrated into existence by narratives upon one s own exceptionalism and Otherness of the other nations. While national identity may be understood merely as a self-image of a nation, defence identity refers to the borders of Otherness and issues that have been considered as worth defending for. As national identities and all the world order models are human constructions, they may be changed by the human efforts as well; states and nations may deliberately promote communitarian or even cosmopolitan equality and tolerance without borders of Otherness. The main research question of the thesis is: How does Poland constitute herself as a nation and a state agent in the current world order and to what extent have contextual foreign and defence policy interactions changed the Polish defence identity during the post-Cold War era? The main empirical argument of the thesis is: Poland is a narrated idea of a Christian Catholic nation-state, which the Polish State, the Catholic Church of Poland, the Armed Forces of Poland as well as a majority of the Polish nation share. Polish defence identity has been almost impenetrable to contextual foreign and defence policy interactions during the post-Cold War era. While Christian religious ontology binds corporate Poland together, allowing her to survive any number of military and political catastrophes, it simultaneously brings her closer to the USA, raises tensions in the infidel EU-context, and restrains corporate Poland s pursuit of communitarian, or even cosmopolitan, global equality and tolerance. It is not the case that corporate Poland s foreign and defence policy orientation is instinctively Atlanticist by nature, as has been argued. Rather, it has been the State s rational project to overcome a habituated and reified fear of becoming geopolitically sandwiched between Russian and German Others by leaning on the USA; among the Polish nation, support for the USA has been declining since 2004. It is not corporate Poland either that has turned into a constructive European , as has been argued, but rather the Polish nation that has, at least partly, managed to emancipate itself from its habituation to a betrayal by Europe narrative, since it favours the EU as much as it favours NATO. It seems that in the Polish case a truly common European CFSP vis-à-vis Russia may offer a solution that will emancipate the Polish State from its habituated EU-sceptic role identity and corporate Poland from its narrated borders of Otherness towards Russia and Germany, but even then one cannot be sure whether any other perspective than the Polish one on a common stand towards Russia would satisfy the Poles themselves.

Finnish and Austrian Wood Markets in a Changing Environment

At present the operating environment of sawmills in Europe is changing and there are uncertainties related in raw material supply in many countries. The changes in the operating environment of roundwood markets and the effects followed by these changes have brought up several interesting issues from the viewpoint of research. Lately new factors have been influencing the roundwood markets, such as increasing interest towards wood-based energy and implementation of new energy policies as well as changes in wood trade flows that affect the domestic markets in many countries. This Master’s thesis studies the adaptation ability of Finnish roundwood markets in a changing operating environment, aiming to produce an up-to-date analysis considering new development trends. The study concentrates on the roundwood markets from the viewpoint of sawmill industry since the industry is dependent on the functioning of the markets and sawmills are highly affected by the changes on the roundwood markets. To facilitate international comparison, the study is implemented by comparing Finnish and Austrian roundwood markets and analysing changes happening in the two countries. Finland and Austria share rather similar characteristics in the roundwood market structures, forest resources and forest ownership as well as production of roundwood and sawnwood. In addition they both are big exporters of forest industry products. In this study changes in the operating environment of sawmill industry both in Finland as well as in Austria are compared to each other aiming to recognise the main similarities and differences between the countries. In addition both development possibilities as well as challenges followed by the changes are discussed. The aim of the study is to define the main challenges and possibilities confronted by the actors on the markets and also to find new perspectives to approach these. The study is implemented as a qualitative study. The theoretical framework of the study describes the operating environment of wood markets from the viewpoint of the sawmill industry and represents the effects of supply and demand on the wood markets. The primary research material of the study was gathered by interviewing high level experts of forestry and sawmill industry in both Finland and Austria. The aim was to receive as extensive country specific viewpoint from the markets as possible, hence interviewees represented different parties of the markets. After creating country-specific profiles based on the theoretical framework a cross-country comparison was implemented. As a consequence the main similarities and differences in the operating environment and on the roundwood markets of Finland and Austria were recognized. In addition the main challenges and possibilites were identified. The results of the study offer a wide analysis regarding the main similarities and differences of the wood markets of Finland and Austria and their operating environments as well as concerning challenges and possibilities faced on the markets.