Essays on the Costs and Benefits of Large Shareholders in Corporate Governance (summary section only)

“Corporate governance deals with the ways in which suppliers of finance to firms assure themselves of getting a return on their investment” (Shleifer and Vishny (1997, p. 737). According to La Porta et al. (1999), research in corporate finance relevant for most countries should focus on the incentives and capabilities of controlling shareholders to treat themselves preferentially at the expense of minority shareholders. Accordingly, this thesis sets out to answer a number of research questions regarding the role of large shareholders in public firms that have received little attention in the literature so far. A common theme in the essays stems from the costs and benefits of individual large-block owners and the role of control contestability from the perspective of outside minority shareholders. The first essay empirically examines whether there are systematic performance differences between family controlled and nonfamily controlled firms in Western Europe. In contrast to the widely held view that family control penalizes firm value, the essay shows that publicly traded family firms have higher performance than comparable firms. In the second essay, we present both theoretical and empirical analysis on the effects of control contestability on firm valuation. Consistent with the theoretical model, the empirical results show that minority shareholders benefit from a more contestable control structure. The third essay explores the effects of individual large-block owners on top management turnover and board appointments in Finnish listed firms. The results indicate that firm performance is an important determinant for management and board restructurings. For certain types of turnover decisions the corporate governance structure influences the performance / turnover sensitivity. In the fourth essay, we investigate the relation between the governance structure and dividend policy in Finnish listed firms. We find evidence in support of the outcome agency model of dividends stating that lower agency conflicts should be associated with higher dividend payouts.

Corporate Governance in China (summary section only)

The negative relationship between economic growth and stock market return is not an anomaly according to evidence documented in many economies. It is argued that future economic growth is largely irrelevant for predicting future equity returns, since long-run equity returns depend mainly on dividend yields and the growth of per share dividends. The economic growth does result in a higher standard of living for consumers, but does not necessarily translate into higher returns for owners of the capital. The divergence in performance between the real sector and stock markets appears to support the above argument. However, this thesis strives to offer an alternative explanation to the apparent divergence within the framework of corporate governance. It argues that weak corporate governance standards in Chinese listed firms exacerbated by poor inventor protection results into a marginalized capital market. Each of the three essays in the thesis addresses one particular aspect of corporate governance on the Chinese stock market in a sequential way through gathering empirical evidence on three distinctive stock market activities. The first essay questions whether significant agency conflicts do exist by building a game on rights issues. It documents significant divergence in interests among shareholders holding different classes of shares. The second essay investigates the level of agency costs by examining value of control through constructing a sample of block transactions. It finds that block transactions that transfer ultimate control entail higher premiums. The third essay looks into possible avenues through which corporate governance standards could be improved by investigating the economic consequences of cross-listing on the Chinese stock market. It finds that, by adopting a higher disclosure standard through cross-listings, firms voluntarily commit themselves to reducing information asymmetry, and consequently command higher valuation than their counterparts.

A capability-based view of organisational renewal : Combining opportunity- and advantage-seeking growth in large, established European and North American wood-industry companies

The purpose of this study was to extend understanding of how large firms pursuing sustained and profitable growth manage organisational renewal. A multiple-case study was conducted in 27 North American and European wood-industry companies, of which 11 were chosen for closer study. The study combined the organisational-capabilities approach to strategic management with corporate-entrepreneurship thinking. It charted the further development of an identification and classification system for capabilities comprising three dimensions: (i) the dynamism between firm-specific and industry-significant capabilities, (ii) hierarchies of capabilities and capability portfolios, and (iii) their internal structure. Capability building was analysed in the context of the organisational design, the technological systems and the type of resource-bundling process (creating new vs. entrenching existing capabilities). The thesis describes the current capability portfolios and the organisational changes in the case companies. It also clarifies the mechanisms through which companies can influence the balance between knowledge search and the efficiency of knowledge transfer and integration in their daily business activities, and consequently the diversity of their capability portfolio and the breadth and novelty of their product/service range. The largest wood-industry companies of today must develop a seemingly dual strategic focus: they have to combine leading-edge, innovative solutions with cost-efficient, large-scale production. The use of modern technology in production was no longer a primary source of competitiveness in the case companies, but rather belonged to the portfolio of basic capabilities. Knowledge and information management had become an industry imperative, on a par with cost effectiveness. Yet, during the period of this research, the case companies were better in supporting growth in volume of the existing activity than growth through new economic activities. Customer-driven, incremental innovation was preferred over firm-driven innovation through experimentation. The three main constraints on organisational renewal were the lack of slack resources, the aim for lean, centralised designs, and the inward-bound communication climate.

Eurasian Neogene large herbivorous mammals and climate

The development and changes in the distribution of herbivorous mammal communities during the Neogene is complex. The Eurasian scale environmental patterns reflect the large scale geographical and climatic patterns. The reorganization of these affect the biome distribution throughout the continent. The distribution of mammal taxa was closely associated with the distribution of biomes. In Eurasia the Neogene development of environments was twofold. The early and middle Miocene that seemed to have been advantageous for mammals was followed by drying of environments during the late Neogene. The mid-latitude drying was the main trend, and it is the combined result of the retreat of Paratethys, the uplift of Tibetan Plateau and changes in the ocean currents and temperatures. The common mammals were "driving" the evolution of mammalian communities. During the late Miocene we see the drying affecting more and more regions, and we see changes in the composition of mammalian communities.

Forest inventory-based large-scale forest biomass and carbon budget assessment: new enhanced methods and use of remote sensing for verification

In recent years, concern has arisen over the effects of increasing carbon dioxide (CO2) in the earth's atmosphere due to the burning of fossil fuels. One way to mitigate increase in atmospheric CO2 concentration and climate change is carbon sequestration to forest vegeta-tion through photosynthesis. Comparable regional scale estimates for the carbon balance of forests are therefore needed for scientific and political purposes. The aim of the present dissertation was to improve methods for quantifying and verifying inventory-based carbon pool estimates of the boreal forests in the mineral soils. Ongoing forest inventories provide a data based on statistically sounded sampling for estimating the level of carbon stocks and stock changes, but improved modelling tools and comparison of methods are still needed. In this dissertation, the entire inventory-based large-scale forest carbon stock assessment method was presented together with some separate methods for enhancing and comparing it. The enhancement methods presented here include ways to quantify the biomass of understorey vegetation as well as to estimate the litter production of needles and branches. In addition, the optical remote sensing method illustrated in this dis-sertation can be used to compare with independent data. The forest inventory-based large-scale carbon stock assessment method demonstrated here provided reliable carbon estimates when compared with independent data. Future ac-tivity to improve the accuracy of this method could consist of reducing the uncertainties regarding belowground biomass and litter production as well as the soil compartment. The methods developed will serve the needs for UNFCCC reporting and the reporting under the Kyoto Protocol. This method is principally intended for analysts or planners interested in quantifying carbon over extensive forest areas.

Ecological processes and large-scale climate relationships in northern coniferous forests

Ilmasto vaikuttaa ekologisiin prosesseihin eri tasoilla. Suuren mittakaavan ilmastoprosessit, yhdessä ilmakehän ja valtamerien kanssa, säätelevät paikallisia sääilmiöitä suurilla alueilla (mantereista pallopuoliskoihin). Tämä väistöskirja pyrkii selittämään kuinka suuren mittakaavan ilmasto on vaikuttanut tiettyihin ekologisiin prosesseihin pohjoisella havumetsäalueella. Valitut prosessit olivat puiden vuosilustojen kasvu, metsäpalojen esiintyminen ja vuoristomäntykovakuoriaisen aiheuttamat puukuolemat. Suuren mittakaavan ilmaston löydettiin vaikuttaneen näiden prosessien esiintymistiheyteen, kestoon ja levinneisyyteen keskeisten sään muuttujien välityksellä hyvin laajoilla alueilla. Tutkituilla prosesseilla oli vahva yhteys laajan mittakaavan ilmastoon. Yhteys on kuitenkin ollut hyvin dynaaminen ja muuttunut 1900-luvulla ilmastonmuutoksen aiheuttaessa muutoksia suuren mittakaavan ja alueellisten ilmastoprosessien välisiin sisäisiin suhteisiin.

Eurasian large mammal dynamics in response to changing environments during the Late Neogene

Nisäkkäiden levinneisyyteen, niiden morfologisiin ja ekologisiin piirteisiin vaikuttavat ympäristön sekä lyhyet että pitkäkestoiset muutokset, etenkin ilmaston ja kasvillisuuden vaihtelut. Työssä tutkittiin nisäkkäiden sopeutumista ilmastonmuutoksiin Euraasiassa viimeisen 24 miljoonan vuoden aikana. Tutkimuksessa keskityttiin varsinkin viimeiseen kahteen miljoonaan vuoteen, jonka aikana ilmasto muuttui voimakkaasti ja ihmisen toiminta alkoi tulla merkittäväksi. Tämän takia on usein vaikea erottaa, kummasta em. seikasta jonkin nisäkäslajin sukupuutto tai häviäminen alueelta johtui. Aineistona käytettiin laajaa venäjänkielistä kirjallisuutta, josta löytyvät tiedot ovat kääntämättöminä jääneet aiemmin länsimaisen tutkimuksen ulkopuolelle. Työssä käytettiin myös NOW-tietokantaa, jossa on fossiilisten nisäkkäiden löytöpaikat sekä niiden iät.

Computational Methods for Detecting Large-Scale Chromosome Rearrangements in SNP Data

Large-scale chromosome rearrangements such as copy number variants (CNVs) and inversions encompass a considerable proportion of the genetic variation between human individuals. In a number of cases, they have been closely linked with various inheritable diseases. Single-nucleotide polymorphisms (SNPs) are another large part of the genetic variance between individuals. They are also typically abundant and their measuring is straightforward and cheap. This thesis presents computational means of using SNPs to detect the presence of inversions and deletions, a particular variety of CNVs. Technically, the inversion-detection algorithm detects the suppressed recombination rate between inverted and non-inverted haplotype populations whereas the deletion-detection algorithm uses the EM-algorithm to estimate the haplotype frequencies of a window with and without a deletion haplotype. As a contribution to population biology, a coalescent simulator for simulating inversion polymorphisms has been developed. Coalescent simulation is a backward-in-time method of modelling population ancestry. Technically, the simulator also models multiple crossovers by using the Counting model as the chiasma interference model. Finally, this thesis includes an experimental section. The aforementioned methods were tested on synthetic data to evaluate their power and specificity. They were also applied to the HapMap Phase II and Phase III data sets, yielding a number of candidates for previously unknown inversions, deletions and also correctly detecting known such rearrangements.

The Gerbera cDNA Microarray: A Tool for Large-Scale Identification of Genes Involved in Flower Development

During the past ten years, large-scale transcript analysis using microarrays has become a powerful tool to identify and predict functions for new genes. It allows simultaneous monitoring of the expression of thousands of genes and has become a routinely used tool in laboratories worldwide. Microarray analysis will, together with other functional genomics tools, take us closer to understanding the functions of all genes in genomes of living organisms. Flower development is a genetically regulated process which has mostly been studied in the traditional model species Arabidopsis thaliana, Antirrhinum majus and Petunia hybrida. The molecular mechanisms behind flower development in them are partly applicable in other plant systems. However, not all biological phenomena can be approached with just a few model systems. In order to understand and apply the knowledge to ecologically and economically important plants, other species also need to be studied. Sequencing of 17 000 ESTs from nine different cDNA libraries of the ornamental plant Gerbera hybrida made it possible to construct a cDNA microarray with 9000 probes. The probes of the microarray represent all different ESTs in the database. From the gerbera ESTs 20% were unique to gerbera while 373 were specific to the Asteraceae family of flowering plants. Gerbera has composite inflorescences with three different types of flowers that vary from each other morphologically. The marginal ray flowers are large, often pigmented and female, while the central disc flowers are smaller and more radially symmetrical perfect flowers. Intermediate trans flowers are similar to ray flowers but smaller in size. This feature together with the molecular tools applied to gerbera, make gerbera a unique system in comparison to the common model plants with only a single kind of flowers in their inflorescence. In the first part of this thesis, conditions for gerbera microarray analysis were optimised including experimental design, sample preparation and hybridization, as well as data analysis and verification. Moreover, in the first study, the flower and flower organ-specific genes were identified. After the reliability and reproducibility of the method were confirmed, the microarrays were utilized to investigate transcriptional differences between ray and disc flowers. This study revealed novel information about the morphological development as well as the transcriptional regulation of early stages of development in various flower types of gerbera. The most interesting finding was differential expression of MADS-box genes, suggesting the existence of flower type-specific regulatory complexes in the specification of different types of flowers. The gerbera microarray was further used to profile changes in expression during petal development. Gerbera ray flower petals are large, which makes them an ideal model to study organogenesis. Six different stages were compared and specifically analysed. Expression profiles of genes related to cell structure and growth implied that during stage two, cells divide, a process which is marked by expression of histones, cyclins and tubulins. Stage 4 was found to be a transition stage between cell division and expansion and by stage 6 cells had stopped division and instead underwent expansion. Interestingly, at the last analysed stage, stage 9, when cells did not grow any more, the highest number of upregulated genes was detected. The gerbera microarray is a fully-functioning tool for large-scale studies of flower development and correlation with real-time RT-PCR results show that it is also highly sensitive and reliable. Gene expression data presented here will be a source for gene expression mining or marker gene discovery in the future studies that will be performed in the Gerbera Laboratory. The publicly available data will also serve the plant research community world-wide.

Effects of large-scale human land use on Capercaillie (Tetrao urogallus L.) populations in Finland

The Capercaillie (Tetrao urogallus L.) is often used as a focal species for landscape ecological studies: the minimum size for its lekking area is 300 ha, and the annual home range for an individual may cover 30 80 km2. In Finland, Capercaillie populations have decreased by approximately 40 85%, with the declines likely to have started in the 1940s. Although the declines have partly stabilized from the 1990s onwards, it is obvious that the negative population trend was at least partly caused by changes in human land use. The aim of this thesis was to study the connections between human land use and Capercaillie populations in Finland, using several spatial and temporal scales. First, the effect of forest age structure on Capercaillie population trends was studied in 18 forestry board districts in Finland, during 1965 1988. Second, the abundances of Capercaillie and Moose (Alces alces L.) were compared in terms of several land-use variables on a scale of 50 × 50 km grids and in five regions in Finland. Third, the effects of forest cover and fine-grain forest fragmentation on Capercaillie lekking area persistence were studied in three study locations in Finland, on 1000 and 3000 m spatial scales surrounding the leks. The analyses considering lekking areas were performed with two definitions for forest: > 60 and > 152 m3ha 1 of timber volume. The results show that patterns and processes at large spatial scales strongly influence Capercaillie in Finland. In particular, in southwestern and eastern Finland, high forest cover and low human impact were found to be beneficial for this species. Forest cover (> 60 m3ha 1 of timber) surrounding the lekking sites positively affected lekking area persistence only at the larger landscape scale (3000 m radius). The effects of older forest classes were hard to assess due to scarcity of older forests in several study areas. Young and middle-aged forest classes were common in the vicinity of areas with high Capercaillie abundances especially in northern Finland. The increase in the amount of younger forest classes did not provide a good explanation for Capercaillie population decline in 1965 1988. In addition, there was no significant connection between mature forests (> 152 m3ha 1 of timber) and lekking area persistence in Finland. It seems that in present-day Finnish landscapes, area covered with old forest is either too scarce to efficiently explain the abundance of Capercaillie and the persistence of the lekking areas, or the effect of forest age is only important when considering smaller spatial scales than the ones studied in this thesis. In conclusion, larger spatial scales should be considered for assessing the future Capercaillie management. According to the proposed multi-level planning, the first priority should be to secure the large, regional-scale forest cover, and the second priority should be to maintain fine-grained, heterogeneous structure within the separate forest patches. A management unit covering hundreds of hectares, or even tens or hundreds of square kilometers, should be covered, which requires regional-level land-use planning and co-operation between forest owners.