The Finnish Competition State and Entrepreneurial Policies in the Helsinki Region

The thesis examines the intensification and characteristics of a policy that emphasises economic competitiveness in Finland during the 1990s and early 2000s. This accentuation of economic objectives is studied at the level of national policy-making as well as at the regional level through the policies and strategies of cities and three universities in the Helsinki region. By combining the analysis of state policies, urban strategies and university activities, the study illustrates the pervasiveness of the objective of economic competitiveness and growth across these levels and sheds light on the features and contradictions of these policies on a broad scale. The thesis is composed of five research articles and a summary article. At the level of national policies, the central focus of the thesis is on the growing role of science and technology policy as a state means to promote structural economic change and its transformation towards a broader, yet ambivalent concept of innovation policy. This shift brings forward a tension between an increasing emphasis on economic aspects – innovations and competitiveness – as well as the expanding scope of issues across a wide range of policy sectors that are being subsumed under this market- and economy oriented framework. Related to science and technology policy, attention is paid to adjustments in university policy in which there has been increasing pressure for efficiency, rationalisation and commercialisation of academic activities. Furthermore, political efforts to build an information society through the application of information and communication technologies are analysed with particular attention to the balance between economic and social objectives. Finally, changes in state regional policy priorities and the tendency towards competitiveness are addressed. At the regional level, the focus of the thesis is on the policies of the cities in Finland’s capital region as well as strategies of three universities operating in the region, namely the University of Helsinki, Helsinki University of technology and Helsinki School of Economics. As regards the urban level, the main focus is on the changes and characteristics of the urban economic development policy of the City of Helsinki. With respect to the universities, the thesis examines their attempts to commercialise research and thus bring academic research closer to economic interests, and pays particular attention to the contradictions of commercialisation. Related to the universities, the activities of three intermediary organisations that the universities have established in order to increase cooperation with industry are analysed. These organisations are the Helsinki Science Park, Otaniemi International Innovation Centre and LTT Research Ltd. The summary article provides a synthesis of the material presented in the five original articles and relates the results of the articles to a broader discussion concerning the emergence of competition states and entrepreneurial cities and regions. The main points of reference are Bob Jessop’s and Neil Brenner’s theses on state and urban-regional restructuring. The empirical results and considerations from Finland and the Helsinki region are used to comment on, specify and criticise specific parts of the two theses.

From Creative Ideas to New Emerging Ventures: Entrepreneurial Processes among Finnish Design Entrepreneurs

This study focuses on self-employed industrial designers and how they emerge new venture ideas. More specifically, this study strives to determine what design entrepreneurs do when they create new venture ideas, how venture ideas are nurtured into being, and how the processes are organized to bring such ideas to the market in the given industrial context. In contemporary times when the concern for the creative class is peaking, the research and business communities need more insight of the kind that this study provides, namely how professionals may contribute to their entrepreneurial processes and other agents’ business processes. On the one hand, the interviews underlying this study suggest that design entrepreneurs may act as reactive service providers who are appointed by producers or marketing parties to generate product-related ideas on their behalf. On the other hand, the interviews suggest that proactive behaviour that aims on generating own venture ideas, may force design entrepreneurs to take considerable responsibility in organizing their entrepreneurial processes. Another option is that they strive to bring venture ideas to the market in collaboration, or by passing these to other agents’ product development processes. Design entrepreneurs’ venture ideas typically emerge from design related starting points and observations. Product developers are mainly engaged with creating their own ideas, whereas service providers refer mainly to the development of other agents’ venture ideas. In contrast with design entrepreneurs, external actors commonly emphasize customer demand as their primary source for new venture ideas, as well as development of these in close interaction with available means of production and marketing. Consequently, design entrepreneurs need to address market demand since without sales their venture ideas may as well be classified as art. In case, they want to experiment with creative ideas, then there should be another source of income to support this typically uncertain and extensive process. Currently, it appears like a lot of good venture ideas and resources are being wasted, when venture ideas do not suite available production or business procedures. Sufficient communication between design entrepreneurs and other agents would assist all parties in developing production efficient and distributable venture ideas. Overall, the findings suggest that design entrepreneurs are often involved simultaneously in several processes that aim at emerging new product related ventures. Consequently, design entrepreneurship is conceptualized in this study as a dual process. This implies that design entrepreneurs can simultaneously be in charge of their entrepreneurial processes, as they operate as resources in other agents’ business processes. The interconnection between activities and agents suggests that these kinds of processes tend to be both complex and multifaceted to their nature.

Multiple Perspectives on Networks: Conceptual Development, Application and Integration in an Entrepreneurial Context

Multiple Perspectives on Networks: Conceptual Development, Application and Integration in an Entrepreneurial Context. The purpose of this thesis is to enhance cross-fertilization between three different approaches to network research. The business network approach may contribute in terms of how relationships are created, developed and how tie content changes within ties, not only between them. The social network approach adds to the discussion by offering concepts of structural change on a network level. The network approach in entrepreneurship contributes by emphasizing network content, governance and structure as a way of understanding and capturing networks. This is discussed in the conceptual articles, Articles 2 and 3. The ultimate purpose of this thesis is to develop a theoretical and empirical understanding of network development processes. This is fulfilled by presenting a theoretical framework, which offers multiple views on process as a developmental outcome. The framework implies that change ought to be captured both within and among relationships over time in the firm as well as in the network. Consequently, changes in structure and interaction taking place simultaneously need to be included when doing research on network development. The connection between micro and macro levels is also stressed. Therefore, the entrepreneur or firm level needs to be implemented together with the network level. The surrounding environment impacts firm and network development and vice versa and hence needs to be integrated. Further, it is necessary to view network development not only as a way forward but to include both progression and regression as inevitable parts of the process. Finally, both stability and change should be taken into account as part of network development. Empirical results in Article 1 show support for a positive impact of networks on SME internationalization. Article 4 compares networks of novice, serial and portfolio entrepreneurs but the empirical results show little support for differences in the networks by type of entrepreneur. The results demonstrate that network interaction and structure is not directly impacted by type of entrepreneur involved. It indicates instead that network structure and interaction is more impacted by the development phase of the firm. This in turn is in line with the theoretical implications, stating that the development of the network and the firm impacts each other, as they co-evolve.

Mentoring in an Entrepreneurial Setting - The Mentor's Perspective

This paper discusses mentoring from the mentors' point of view in an entrepreneurial setting. The aim of the paper is to present why mentoring can be considered important for entrepreneurs who are mentors and under what circumstances mentoring is valuable for the mentor. A pilot mentorprogramme was conducted among women entrepreneurs during 1998. A study was made in order to examine the mentors’ perception of the programme. Firstly mentoring and entrepreneurship in Finland are discussed briefly. Secondly the results of the study are presented. The results of the study show that mentoring can be valuable for the mentors both on a vocational and a personal level. However, it is important to choose the mentees of the programme on a rather strict basis. The results demonstrate a need to be careful in choosing mentees.

Opportunity Exploration and Exploitation in International New Ventures: A Study of Relationships’ Involvement in Early Entrepreneurial and Internationalisation Events

International new ventures (INVs) are firms that engage very early after their foundation, if not immediately, in inter-national activities. INVs are a relatively recent phenomenon that deviates from earlier theories on international business. In order to develop our understanding of the emergence and early internationalisation of INVs three different research areas are built upon in the dissertation: International Entrepreneurship, Entrepreneurship and Networks. Net-works have been identified as important for INVs. However, there is a lack of more profound studies regarding the way different types of relationships influence INVs. Few studies are concerned with exploration and exploitation of opportunities and research on the benefits and drawbacks of entrepreneurs’ relationships for the international opportunity recognition process has been called for. By taking a network approach to opportunity exploration and exploitation, the dissertation develops our under-standing of how entrepreneurs’ relationships are involved in exploring and exploiting opportunities during an INV’s early and critical entrepreneurial and internationalisation events. The critical events are studied during three phases: pre-founding, start-up and early internationalisation. Since internationalisation is present from the very beginning, the early internationalisation phase may be parallel to both the pre-founding and the start-up phase. The dissertation contributes to international entrepreneur-ship research in mainly two ways. First, by offering a deep insight into which opportunity exploration and exploitation activities entrepreneurs’ relationships are involved. Second, by adding to our understanding of what the relationships contribute to these activities, mainly in the sense of benefits gained through the relationships. Studying micro firms in real time in their early development towards INVs is considered a unique contribution of the study as it offers valuable insights into pre-founding, start-up, pre-internationalisation as well as early internationalisation. The study shows that in order to understand the development of INVs, it is beneficial to go back to times when there was no thought of starting the INV. By focusing on the entrepreneurs’ background and relationships a more complete picture of the INV is gained. Relationships created at former workplaces or during school time might be the ones that develop business opportunities and set off internationalisation. By focusing on the pre-founding phase, the study also contributes to entrepreneurship literature as this stage has often been neglected or assumed obvious in earlier research. This dissertation shows that an important and mostly lengthy pre-founding phase precedes the decision to start a f rm. In addition, the integration of entrepreneurs’ real experiences with existing theory to develop a continuum for the strength of relationships allows for contributions to network theory.

Constructing and negotiating entrepreneurial agency : A social psychological approach to entrepreneurship discourse in the farm context

Entrepreneurship, understood as the autonomous, effective pursuit of opportunities regardless of resources, is currently subject to a multitude of interests, expectations, and facilitation efforts. On the one hand, such entrepreneurial agency has broad appeal to individuals in Western market democracies and resonates with their longing for an autonomous, personally tailored, meaningful, and materially rewarding way of life. On the other hand, entrepreneurship represents a tempting and increasingly popular means of governance and policy making, and thus a model for the re-organization of a variety of societal sectors. This study focuses on the diffusion and reception of entrepreneurship discourse in the context of farming and agriculture, where pressures to adopt entrepreneurial orientations have been increasingly pronounced while, on the other hand, the context of farming has historically enjoyed state protection and adhered to principles that seem at odds with aspects of individualistic entrepreneurship discourse . The study presents an interpretation of the psychologically and politically appealing uses of the notion of entrepreneurial agency , reviews the historical and political background of the current situation of farming and agriculture with regard to entrepreneurship, and examines their relationships in four empirical studies. The study follows and develops a social psychological, situated relational approach that guides the qualitative analyses and interpretations of the empirical studies. Interviews with agents from the farm sector aim to stimulate evaluative responses and comments on the idea of entrepreneurship on farms. Analysis of the interview talk, in turn, detects the variety of evaluative responses and argumentative contexts with which the interviewees relate themselves to the entrepreneurship discourse and adopt, use, resist, or reject it. The study shows that despite the pressures towards entrepreneurialism, the diffusion of entrepreneurship discourse and the construction of entrepreneurial agency in farm context encounter many obstacles. These obstacles can be variably related to aspects dealing with the individual agent, the action situation, the characteristics of the action itself, or to the broader social, institutional and cultural context. Many aspects of entrepreneurial agency, such as autonomy, personal initiative and achievement orientation, are nevertheless familiar to farmers and are eagerly related to one s own farming activities. The idea of entrepreneurship is thus rarely rejected outright. The findings highlight the relational and situational preconditions for the construction of entrepreneurial agency in the farm context: When agents demonstrate entrepreneurial agency, they do so by drawing on available and accessed relational resources characteristic of their action context. Likewise, when agents fail or are reluctant to demonstrate entrepreneurial agency, they nevertheless actively account for their situation and demonstrate personal agency by drawing on the relational resources available to them.

Metsäpirulainen : Liikemies Erik Johan Längman (1799-1863) talousjärjestelmän murroksessa

The Forest devil. Businessman Erik Johan Längman (1799 1863) in the transition of economic system In Finnish historiography, Erik Johan Längman (1799-1863) bears a bad reputation of his own level: a mean, profit-seeking businessman who did not care too much about methods in his operations. Although little known, Längman has been praised as one of the pioneers of modern industry in the Grand Duchy of Finland, which belonged to the Russian Empire. From the mid 1830s Längman owned iron mill and several sawmills around the country. The growing demand of the markets in the 1830s, especially in Great Britain, marked a strong stimulus to Finnish lumber industry. At the same time claims for stricter rule over the sawmill industry were raised by high officials. The momentum of the conflict, the Forest Act of 1851, brought an end to illegal overproduction. In this biography, particular emphasis is laid on the entrepreneurial behaviour of Längman, but also on the effect the entrepreneurs had on the Crown s policies. On the other hand, how did the limitations imposed by the Crown guide the actions of the sawmill owners? The solutions adopted by the sawmill owners and the manoeuvring of the government are in a constant dialogue in this study. The Finnish sawmill industry experienced a major change in its techniques and methods of acquiring timber during the 1830s. Längman particularly, with his acquisition organisation, was able to find and reach faraway forests with unexpected results. The official regulating system with its strict producing quotas couldn t follow the changes. When the battle against the sawmill industry really started on, in 1840, it didn t happen for the benefit of iron industry, as argued previously, but to save Crown forests from depletion. After the mid 1840s Längman and the leader of the Finnish nationalistic movement, J. V. Snellman questioned the rationality of the entire regulation system and in doing so they also posed a threat against the aristocratic power. The influential but now also badly provoked chairman of the economic division of senate, Lars Gabriel von Haartman, accused the sawmill-owners harder than ever and took the advantage of the reactionary spirit of imperial Russia to launch the state forest administration. Längman circumvented the conditions of privileges, felled Crown forests illegally and accusations were brought against him for destroying his competitors. The repeated conflicts spoke primarily about a superior business idea and organisational ability. Although Längman spent his last years mostly abroad he still had interests in Finnish timber business when the liberation of sawmill-industry was established, in 1861. Surprisingly, the antagonism around the Crown forests continued, probably even more heated.

Vikuroivia vilkaisuja : Ruumis, sukupuoli, seksuaalisuus ja visuaalisen kulttuurin tutkimus

The PhD dissertation "Bucking Glances: On Body, Gender, Sexuality and Visual Culture Research" consists of theoretical introduction and five articles published between 2002-2005. The articles analyze the position of visual representations in the processes of knowledge production on acceptable genders, bodies, and sexualities in contemporary Wes¬tern societies. The research material is heterogeneous, consisting of representations of contemporary art, advertisements, and fashion images. The ideological starting point of the PhD dissertation is the politics of the gaze and the methods used to expose this are the concepts of oppositional gaze, close reading, and resisting reading. The study situates visual representations in dialogue with the concepts of the grotesque and androgyny, as well as with queer-theory and theories of the gaze. The research challenges normative meanings of visual representations and opens up space for more non-conventional readings attached to femininity and masculinity. The visual material is read as troubling the prevailing heteronormative gender system. The dissertation also indicates how visual culture research utilizing the approach of queer theory can be fruitful in opposing and re-visioning changes in the repressive gender system. The article "A Heroic Male and A Beautiful Woman. Teemu Mäki, Orlan and the Ambivalence of the Grotesque Body" problematizes the concept of heroic masculinity through the analysis of the Finnish artist Teemu Mäki's masochistic performance The Good Friday (1989). It also analyzes cosmetic surgery, undertaken by the French artist Orlan, as a cultural tool in constructing and visualizing the contemporary, com¬mercial ideals of female beauty. The article "Boys Will Be Girls Will Be Boys Will Be Girls. The Ambivalence of Androgyny in Calvin Klein' Advertisements" is a close reading of the Calvin Klein perfume advertisement One (1998) in reference to the concept of androgyny. The critical point of the article is that androgynous male bodies allow the extension of the categorical boundaries of masculinity and homosexuality, whereas representations of androgynous women feed into the prevailing stereotypes of femininity, namely the fear of fat. The article "See-through Closet: Female Androgyny in the 1990s Fashion Images, New Woman and Lesbian Chic" analyzes the late 1990s fashion advertisements through the concept of female androgyny. The article argues that the figures of the masculine female androgynes in the late 1990s fashion magazines do not problematize the dichotomous gender binary. The women do not pass as men but produce a variation of heterosexual desirability. At the same time, the representations open up space for lesbian gazing and desiring. The article "Why are there no lesbian advertisements?" addresses the issue of femme gaze and desire in relation to heterosexual fashion advertisements from the British edition of the mainstream fashion magazine Vogue. The article considers possibilities for resistant femme visibility, identification, and desire. The article "Woman, Food, Home. Pirjetta Brander's and Heidi Romo's Works as Bucking Representations of Femininity" analyses the production and queering of heteronormative femininity and family through the analysis of art works. The article discusses how the term queer has been translated into Finnish. The article also introduces a new translation for the term queer: the noun vikuuri, i.e. faulty form and the verb vikuroida, i.e. to buck. In Finnish, the term vikuuri is the vernacular or broken form of the term figure, i.e. figuuri. Vikuuri represents all forms situated outside the norm and the normative.

Yrittäjyyden arvottaminen akateemisten nuorten argumentoinnissa

Evaluation of entrepreneurship in the speech of academic students and newly qualified young academics a summary of a qualitative attitude study. In Finland very few university students plan to become entrepreneurs. The aim of this research was to examine entrepreneurial attitudes expressed in speech. The material was gathered from interviews with university students and newly qualified young academic adults. The interviewees commented on twelve different sentences with claims formulated using research literature and views that have appeared in public discussions. The interviewees were divided into three different groups based on their self-expressed entrepreneurial intentions. The method of qualitative attitude research (Vesala & Rantanen 1999, 2007) was used in the interviews. The research material was studied using two interpretative theories: (1) The planned behaviour theory (Ajzen 1985, 1991a, b), which makes it possible to focus on the separate elements (attitude towards an act, subjective norms and perceived feasibility) necessary for intentions to develop; and (2) The theory of the two images of entrepreneurship (Vesala 1996), where individualism and relationism can be seen as resources for evaluating entrepreneurship. The subject of the research was how university students and newly qualified young adults viewed entrepreneurship as a general phenomen and in relation to the academic world. A second focus was on the attitudes expressed toward entrepreneurial university education and the possibility of combining entrepreneurship and academic knowledge. Of interest were also questions such as whether academic studies, knowledge and the university itself are resources or barriers to entrepreneurial intentions and entrepreneurship whether university students received any support for their entrepreneurial ambitions from the university and their fellow academic students. The problems tackled by this research were thus the following: How was entrepreneurship seen, both as a general phenomen and in an academic context, when it was evaluated positively, negatively or neutrally by the interviewees? In what way was entrepreneurship constructed in the interviewees attitudes? How were entrepreneurship and the academic world related in the interviewees attitudes? What kind of role did the university as an academic context play in the interviewees attitudes for example were university education and academic knowledge seen as resources or barriers to their entrepreneurial intentions. Traditional attitude studies claim that attitudes are a stable property of an individual. In contrast, rhetorical social psychological and qualitative attitude studies emphasize the contextual and linguistic aspects of attitude, and they offered an alternative viewpoint for this research. The study was based on two general assumptions: attitudes have objects and are evaluative. Here attitude was defined as an evaluative interpresentation made towards an object; adopting an attitude is a contextual process in the sense that attitudes are always concerned with the action context of the persons presenting them. Entrepreneurship, both as a general phenomen and in an academic context, was specified as the object to which an attitude was taken. From a theoretical point of view, qualitative methods suited the general structure of this research well. In a particular, qualitative approach which emphasized contextual elements proved to be both empirically valid and useful for avoiding the problematic assumptions associated with traditional attitude study. The subject of the analysis was the argumentative speech produced by the interviewees. The results of the study show the subjects responses to three main ways of viewing entrepreneurships. The first was an individualistic, ideal image of entrepreneurship. This was mostly evaluated positively and gained wide approval especially among interviewees who included entrepreneurship among their employment choices. Entrepreneurship was seen as the decision to earn one s living independently. In this individualistic image of entrepreneurship, the social context was hardly ever mentioned. Elements which were seen to threaten this ideal image were evaluated negatively. When entrepreneurship was evaluated negatively using the individualistic image of entrepreneurship, it was mentioned that it forced one into a never ending cycle of work and uninterested duties. The relationistic image of entrepreneurship was used as a speech resource when the social context was constructed as an economic resource or a threat to the ideal image of entrepreneurship. In the second view, entrepreneurship was characteristically seen as being based on economics, which was seen as a threat to the ideal individualistic image of entrepreneurship. The risk of economic failure was seen as a limiting factor to entrepreneurial ambitions as it forced entrepreneurs to work around the clock. The third view concerned the relationship between entrepreneurship and the academic world. Entrepreneurship as an employment choice for university educated persons was evaluated as relevant, and thus positively, when university education was constructed as a resource for entrepreneurship - and irrelevant and thus negatively when it was construed as an obstacle, too wide, or when successful entrepreneurship was seen as being mostly based on an individual s personal characteristics. The interviewees with no entrepreneurial intentions expressed the view that academic education didn t provide the proper skills and knowledge for entrepreneurship. The interviewees also expressed interest in university entrepreneurship education, although none had experience on this. The interviewees emphasized the fact that the University didn t encourage them to consider entrepreneurship as a relevant employment choice. The assumption made by this study was that becoming an entrepreneur is a conscious decision, the environment may influence an individual s decisions on how to make a living as it tends to socialise people to act in accordance with cultural traditions. Keywords: Entrepreneurship, Attitudes towards entrepreneurship, Intentional behaviour, Entrepreneurial intention, University entrepreneurship education, Qualitative attitude research (Vesala & Rantanen 1999, 2007), Rhetorical social psychology (Billig 1986), The theory of entrepreneuship s two images: individualism and relationism (Vesala 1996 ), The planned behaviour theory (Ajzen 1985, 1991a, b)

Neighborhood Shopkeepers in Contemporary South Korea: Household, Work, and Locality

This is an ethnographic study of the lived worlds of the keepers of small shops in a residential neighborhood in Seoul, South Korea. It outlines, discusses, and analyses the categories and conceptualizations of South Korean capitalism at the level of households, neighborhoods, and Korean society. These cultural categories were investigated through the neighborhood shopkeepers practices of work and reciprocal interaction as well as through the shopkeepers articulations of their lived experience. In South Korea, the keepers of small businesses have continued to be a large occupational category despite of societal and economic changes, occupying approximately one fourth of the population in active work force. In spite of that, these people, their livelihoods and their cultural and social worlds have rarely been in the focus of social science inquiry. The ethnographic field research for this study was conducted during a 14-month period between November 1998 and December 1999 and in three subsequent short visits to Korea and to the research neighborhood. The fieldwork was conducted during the aftermath of the Asian currency crisis, colloquially termed at the time as the IMF crisis, which highlighted the social and cultural circumstances of small businesskeeper in a specific way. The livelihoods of small-scale entrepreneurs became even more precarious than before; self-employment became an involuntary choice for many middle-class salaried employees who were laid off; and the cultural categories and concepts of society and economy South Korean capitalism were articulated more sharply than before. This study begins with an overview of the contemporary setting, the Korean society under the socially and economically painful outcomes of the economic crisis, and continues with an overview of relevant literature. After introducing the research area and the informants, I discuss the Korean notion of neighborhood, which incorporates both the notions of culturally valued Koreanness and deficiency in the sense of modernity and development. This study further analyses the ways in which the businesskeepers appropriate and reproduce the Korean ideas of men s and women s gender roles and spheres of work. As the appropriation of children s labor is conditional to intergenerational family trajectories which aim not to reproduce parents occupational status but to gain entry to salaried occupations via educational credentials, the work of a married couple is the most common organization of work in small businesses, to which the Korean ideas of family and kin continuity are not applied. While the lack of generational businesskeeping succession suggests that the proprietors mainly subscribe to the notions of familial status that emanate from the practices of the white-collar middle class, the cases of certain women shopkeepers show that their proprietorship and the ensuing economic standing in the family prompts and invites inversed interpretations and uses of common cultural notions of gender. After discussing and analyzing the concept of money and the cultural categorization of leisure and work, topics that emerged as very significant in the lived world of the shopkeepers, this study charts and analyses the categories of identification which the shopkeepers employ for their cultural and social locations and identities. Particular attention is paid to the idea of ordinary people (seomin), which shopkeepers are commonly considered to be most representative of, and which also sums up the ambivalence of neighborhood shopkeepers as a social category: they are not committed to familial reproduction and continuity of the business but aspire non-entrepreneurial careers for their children, while they occupy a significant position in the elaborations of culturally valued notions and ideologies defining Koreanness such as warmheartedness and sociability.

The Relationship Between Liquidity, Trading Activity and Return - Studies of the Finnish and Swedish Stock Markets

Liquidity, or how easy an investment is to buy or sell, is becoming increasingly important for financial market participants. The objective of this dissertation is to contribute to the understanding of how liquidity affects financial markets. The first essays analyze the actions taken by underwriters immediately after listing to improve liquidity of IPO stock. To estimate the impact of underwriter activity on the pricing of the IPOs, the order book during the first weeks of trading in the IPO stock is studied. Evidence of stabilization and liquidity enhancing activities by underwriters is found. The second half of the dissertation is concerned with the daily trading of stocks where liquidity may be impacted by policy issues such as changes in taxes or exchange fees and by opening the access to the markets for foreign investors. The desirability of a transaction tax on securities trading is addressed. An increase in transaction tax is found to cause lower prices and higher volatility. In the last essay the objective is to determine if the liquidity of a security has an impact on the return investors require. The results support the notion that returns are negatively correlated to liquidity.

Angel Investing in Finland: An Analysis Based on Agency Theory and the Incomplete Contracting Theory

Wealthy individuals - business angels who invest a share of their net worth in entrepreneurial ventures - form an essential part of an informal venture capital market that can secure funding for entrepreneurial ventures. In Finland, business angels represent an untapped pool of capital that can contribute to fostering entrepreneurial development. In addition, business angels can bridge knowledge gaps in new business ventures by means of making their human capital available. This study has two objectives. The first is to gain an understanding of the characteristics and investment behaviour of Finnish business angels. The strongest focus here is on the due diligence procedures and their involvement post investment. The second objective is to assess whether agency theory and the incomplete contacting theory are useful theoretical lenses in the arena of business angels. To achieve the second objective, this study investigates i) how risk is mitigated in the investment process, ii) how uncertainty influences the comprehensiveness of due diligence as well as iii) how control is allocated post investment. Research hypotheses are derived from assumptions underlying agency theory and the incomplete contacting theory. The data for this study comprise interviews with 53 business angels. In terms of sample size this is the largest on Finnish business angels. The research hypotheses in this study are tested using regression analysis. This study suggests that the Finnish informal venture capital market appears to be comprised of a limited number of business angels whose style of investing much resembles their formal counterparts’. Much focus is placed on managing risks prior to making the investment by strong selectiveness and by a relatively comprehensive due diligence. The involvement is rarely on a day-to-day basis and many business angels seem to see board membership as a more suitable alternative than involvement in the operations of an entrepreneurial venture. The uncertainty involved does not seem to drive an increase in due diligence. On the contrary, it would appear that due diligence is more rigorous in safer later stage investments and when the business angels have considerable previous experience as investors. Finnish business angels’ involvement post investment is best explained by their degree of ownership in the entrepreneurial venture. It seems that when investors feel they are sufficiently rewarded, in terms of an adequate equity stake, they are willing to involve themselves actively in their investments. The lack of support for a relationship between increased uncertainty and the comprehensiveness of due diligence may partly be explained by an increasing trend towards portfolio diversification. This is triggered by a taxation system that favours investments through investment companies rather than direct investments. Many business angels appear to have substituted a specialization strategy that builds on reducing uncertainty for a diversification strategy that builds on reducing firm specific (idiosyncratic) risk by holding shares in ventures whose returns are not expected to exhibit a strong positive correlation.

Transfers of Family Businesses to Non-Family Buyers - The Selling Business Family Perspective

This study focuses on business families and how they handle transitions such as business transfers. It also tries to shift the balance of research away from successions and towards business transfers as a key topic for family business researchers. In addition, it contributes to the family business research field by further highlighting the importance of the various different contributions in the family business from business family members other than the entrepreneurial founder. Based on interviews with both business family members and business brokers, it appears as important for business families who are selling their family business that it is managed in a similar way in the future regardless of the shift in ownership and management. It is also important that the employees can stay with the business. However, employees are seldom regarded as potential buyers of the family business; most preferably, from the point of view of business family members, this should be somebody who is similar to themselves. Business transfers can be lengthy processes, but once the family business is sold, previous owners most often want to leave the family business. This disengagement can be difficult for business family members if they have not managed to build up some other identity outside the family business environment. Money may compensate for the loss in the short run, but something else is needed in the long run, since the management of money is usually not perceived as that interesting. A family business transfer can have great influence on the members of the business family who is selling, and therefore it is suggested that personal due diligence could be of some help when planning the transfer. That tool can help business family members to analyse their own personal situation, but it may also make it easier to understand how the other business family members feel about the forthcoming change. Everyone is influenced in different ways during a family business transfer, and awareness of this fact may make it easier for the whole business family to adjust to their new environment.

Increasing Knowledge Focus - a Means for Entrepreneurs to Remain on a Growth Path: Essays on the Role and Nature of Knowledge Management in Finnish SMEs (summary section only)

This study explores the role and nature of knowledge management (KM) in small and medium-sized companies (SMEs). Even though the role of knowledge as a competitive advantage is commonly recognized in the SME sector, almost no attention has been paid to the managing and developing of knowledge in SMEs. This thesis consists of three different sub-studies that were reported in four individual essays. The results of the questionnaire study indicate that nearly all companies that responded to the questionnaire (N = 108) found intangible assets, i.e. knowledge resources to be their main source of competitive advantage. However, only less than a third of the companies actively deal with knowledge management. The results also indicate a significant correlation between activity in knowledge management and sustainable organic growth of the company. The interview study (N = 10) explored the context and motives of the SMEs for managing their intangible assets, and the concrete practices of knowledge management. It turned out that KM facilitated change management, clarification of the vision and new strategy formulation. All the interviewed companies were aiming at improved innovation process, new ways of doing business and attaining an increased “knowledge focus” in their business. Nearly all also aspired to grow significantly. Thus, KM provides a strategy for these SMEs to guarantee their survival and sustainability in the turbulent markets. The action research was a process to assess and develop intangible resources in three companies. The experienced benefits were the clarification of future focus and strategy, creation of a common language to discuss strategic issues within the company, as well as improved balance of different categories of intangible assets. After the process all the case companies had developed in the chosen key areas. Thus, by systematic knowledge management the implementation of new strategic orientation (knowledge focusing) was facilitated. The findings can be summarized in two main points. First, knowledge management seems to serve the purpose of change, renewal and new strategic orientation in the SMEs. It also seems to be closely related to organic growth and innovation. All of these factors can be considered dimensions of entrepreneurship. Second, the conscious development of intangible assets can increase the balance of different categories of intangible assets and the overall knowledge focusing of business. In the case companies, this in turn facilitated the path to the improved overall performance.