Essays on Stock Market Reactions to New Information

A functioning stock market is an essential component of a competitive economy, since it provides a mechanism for allocating the economy’s capital stock. In an ideal situation, the stock market will steer capital in a manner that maximizes the total utility of the economy. As prices of traded stocks depend on and vary with information available to investors, it is apparent that information plays a crucial role in a functioning stock market. However, even though information indisputably matters, several issues regarding how stock markets process and react to new information still remain unanswered. The purpose of this thesis is to explore the link between new information and stock market reactions. The first essay utilizes new methodological tools in order to investigate the average reaction of investors to new financial statement information. The second essay explores the behavior of different types of investors when new financial statement information is disclosed to the market. The third essay looks into the interrelation between investor size, behavior and overconfidence. The fourth essay approaches the puzzle of negative skewness in stock returns from an altogether different angle than previous studies. The first essay presents evidence of the second derivatives of some financial statement signals containing more information than the first derivatives. Further, empirical evidence also indicates that some of the investigated signals proxy risk while others contain information priced with a delay. The second essay documents different categories of investors demonstrating systematical differences in their behavior when new financial statement information arrives to the market. In addition, a theoretical model building on differences in investor overconfidence is put forward in order to explain the observed behavior. The third essay shows that investor size describes investor behavior very well. This finding is predicted by the model proposed in the second essay, and hence strengthens the model. The behavioral differences between investors of different size furthermore have significant economic implications. Finally, the fourth essay finds strong evidence of management news disclosure practices causing negative skewness in stock returns.

Network Knowledge versus Cluster Knowledge- The Gordian Knot of Knowledge Transfer Concepts

Both management scholars and economic geographers have studied knowledge and argued that the ability to transfer knowledge is critical to competitive success. Networks and other forms for cooperation are often the context when analyzing knowledge transfer within management research, while economic geographers focus on the role of the cluster for knowledge transfer and creation. With the common interest in knowledge transfer, few attempts to interdisciplinary research have been made. The aim of this paper is to outline the knowledge transfer concepts in the two strands of literature of management and economic geography (EG). The paper takes an analytical approach to review the existing contributions and seek to identify the benefits of further interaction between the disciplines. Furthermore, it offers an interpretation of the concepts of cluster and network, and suggests a clearer distinction between their respective definitions. The paper posits that studies of internal networks transcending national borders and clusters are not necessarily mutually exclusive when it comes to transfer of knowledge and the learning process of the firm. Our conclusion is that researchers in general seem to increasingly acknowledge the importance of studying both the effect of and the need for geographical proximity and external networks for the knowledge transfer process, but that there exists equivocalness in defining clusters and networks.

Cavity-enhanced laser spectroscopic studies of vibrational overtones of acetylene

This thesis contains five experimental spectroscopic studies that probe the vibration-rotation energy level structure of acetylene and some of its isotopologues. The emphasis is on the development of laser spectroscopic methods for high-resolution molecular spectroscopy. Three of the experiments use cavity ringdown spectroscopy. One is a standard setup that employs a non-frequency stabilised continuous wave laser as a source. In the other two experiments, the same laser is actively frequency stabilised to the ringdown cavity. This development allows for increased repetition rate of the experimental signal and thus the spectroscopic sensitivity of the method is improved. These setups are applied to the recording of several vibration-rotation overtone bands of both H(12)C(12)CH and H(13)C(13)CH. An intra-cavity laser absorption spectroscopy setup that uses a commercial continuous wave ring laser and a Fourier transform interferometer is presented. The configuration of the laser is found to be sub-optimal for high-sensitivity work but the spectroscopic results are good and show the viability of this type of approach. Several ro-vibrational bands of carbon-13 substituted acetylenes are recorded and analysed. Compared with earlier work, the signal-to-noise ratio of a laser-induced dispersed infrared fluorescence experiment is enhanced by more than one order of magnitude by exploiting the geometric characteristics of the setup. The higher sensitivity of the spectrometer leads to the observation of two new symmetric vibrational states of H(12)C(12)CH. The precision of the spectroscopic parameters of some previously published symmetric states is also improved. An interesting collisional energy transfer process is observed for the excited vibrational states and this phenomenon is explained by a simple step-down model.

Intergenerational Transfer of Sabbath Observance : How is Religious Tradition Transferred to Children among Finnish Seventh-day Adventists?

This study examined religious home education in educational, psychological, and sociological context. Growing up within a religious denomination is a process of learning the rules, norms, opinions, and attitudes, which serve to make the individual an active member of the group. It is a process of transferring the cultural inheritance between generations. Sabbathkeeping can be regarded as a strong indicator of the Seventh-day Adventist value system, which is also why I have concentrated on this specific issue in my study. The purpose of the study was to find out, how the Sabbath is transferred from parents to children among Finnish Adventists. It was also examined how parents could make the day of rest positively exceptional for children, and how the parental authoritativeness affects the process of transference. According to Bull & Lockhart s (1989) theory, the amount of Adventist generations in family history influences the transfer of religious tradition. This study aimed to find out whether or not this theory would apply to the present-day Finland. The nature of religious development among Adventist young people was also one of the interests of the research. The methods used in the study were in-depth interviews (n = 10) and a survey (n = 106). The majority of the interviewees was young adults (age 15-30) grown up in Adventist families. The interviews were taped and transcribed for the study, and survey answers were analysed with SPSS-data analysis program. The amount of survey questionnaires evaluated was 106, whole population of 15-30 year-old Finnish Adventists being about one thousand. Democratic relationship between parents and children, parents' example, encouragement to own thinking, and positive experiences of Sabbath and the whole religion, including the social dimension of the Adventism, seem to be some of the most significant factors in transference of religious tradition. Both too severe and too permissive education were considered to lead to similar results: unsuccessful transfer of values, or even rebellion and adopting a totally opposite way of life than that of the parents. In this study the amount of Adventist generations in family history does not correlate significantly with the end results of value transference. Keywords: Sabbath, intergenerational, value transference, religious home education Avainsanat: sapatti, arvojen siirtyminen vanhemmilta lapsille, uskonnollinen kotikasvatus

The ozone transfer between atmosphere and vegetation. A study on Scots pine in the field

Ozone (O3) is a reactive gas present in the troposphere in the range of parts per billion (ppb), i.e. molecules of O3 in 109 molecules of air. Its strong oxidative capacity makes it a key element in tropospheric chemistry and a threat to the integrity of materials, including living organisms. Knowledge and control of O3 levels are an issue in relation to indoor air quality, building material endurance, respiratory human disorders, and plant performance. Ozone is also a greenhouse gas and its abundance is relevant to global warming. The interaction of the lower troposphere with vegetated landscapes results in O3 being removed from the atmosphere by reactions that lead to the oxidation of plant-related components. Details on the rate and pattern of removal on different landscapes as well as the ultimate mechanisms by which this occurs are not fully resolved. This thesis analysed the controlling processes of the transfer of ozone at the air-plant interface. Improvement in the knowledge of these processes benefits the prediction of both atmospheric removal of O3 and its impact on vegetation. This study was based on the measurement and analysis of multi-year field measurements of O3 flux to Scots pine (Pinus sylvestris L.) foliage with a shoot-scale gas-exchange enclosure system. In addition, the analyses made use of simultaneous CO2 and H2O exchange, canopy-scale O3, CO2 and H2O exchange, foliage surface wetness, and environmental variables. All data was gathered at the SMEAR measuring station (southern Finland). Enclosure gas-exchange techniques such as those commonly used for the measure of CO2 and water vapour can be applied to the measure of ozone gas-exchange in the field. Through analysis of the system dynamics the occurring disturbances and noise can be identified. In the system used in this study, the possible artefacts arising from the ozone reactivity towards the system materials in combination with low background concentrations need to be taken into account. The main artefact was the loss of ozone towards the chamber walls, which was found to be very variable. The level of wall-loss was obtained from simultaneous and continuous measurements, and was included in the formulation of the mass balance of O3 concentration inside the chamber. The analysis of the field measurements in this study show that the flux of ozone to the Scots pine foliage is generated in about equal proportions by stomatal and non-stomatal controlled processes. Deposition towards foliage and forest is sustained also during night and winter when stomatal gas-exchange is low or absent. The non-stomatal portion of the flux was analysed further. The pattern of flux in time was found to be an overlap of the patterns of biological activity and presence of wetness in the environment. This was seen to occur both at the shoot and canopy scale. The presence of wetness enhanced the flux not only in the presence of liquid droplets but also during existence of a moisture film on the plant surfaces. The existence of these films and their relation to the ozone sinks was determined by simultaneous measurements of leaf surface wetness and ozone flux. The results seem to suggest ozone would be reacting at the foliage surface and the reaction rate would be mediated by the presence of surface wetness. Alternative mechanisms were discussed, including nocturnal stomatal aperture and emission of reactive volatile compounds. The prediction of the total flux could thus be based on a combination of a model of stomatal behaviour and a model of water absorption on the foliage surfaces. The concepts behind the division of stomatal and non-stomatal sinks were reconsidered. This study showed that it is theoretically possible that a sink located before or near the stomatal aperture prevents or diminishes the diffusion of ozone towards the intercellular air space of the mesophyll. This obstacle to stomatal diffusion happens only under certain conditions, which include a very low presence of reaction sites in the mesophyll, an extremely strong sink located on the outer surfaces or stomatal pore. The relevance, or existence, of this process in natural conditions would need to be assessed further. Potentially strong reactions were considered, including dissolved sulphate, volatile organic compounds, and apoplastic ascorbic acid. Information on the location and the relative abundance of these compounds would be valuable. The highest total flux towards the foliage and forest happens when both the plant activity and ambient moisture are high. The highest uptake into the interior of the foliage happens at large stomatal apertures, provided that scavenging reactions located near the stomatal pore are weak or non-existent. The discussion covers the methodological developments of this study, the relevance of the different controlling factors of ozone flux, the partition amongst its component, and the possible mechanisms of non-stomatal uptake.

Bayesian fisheries stock assessment: integrating and updating knowledge

In this thesis the use of the Bayesian approach to statistical inference in fisheries stock assessment is studied. The work was conducted in collaboration of the Finnish Game and Fisheries Research Institute by using the problem of monitoring and prediction of the juvenile salmon population in the River Tornionjoki as an example application. The River Tornionjoki is the largest salmon river flowing into the Baltic Sea. This thesis tackles the issues of model formulation and model checking as well as computational problems related to Bayesian modelling in the context of fisheries stock assessment. Each article of the thesis provides a novel method either for extracting information from data obtained via a particular type of sampling system or for integrating the information about the fish stock from multiple sources in terms of a population dynamics model. Mark-recapture and removal sampling schemes and a random catch sampling method are covered for the estimation of the population size. In addition, a method for estimating the stock composition of a salmon catch based on DNA samples is also presented. For most of the articles, Markov chain Monte Carlo (MCMC) simulation has been used as a tool to approximate the posterior distribution. Problems arising from the sampling method are also briefly discussed and potential solutions for these problems are proposed. Special emphasis in the discussion is given to the philosophical foundation of the Bayesian approach in the context of fisheries stock assessment. It is argued that the role of subjective prior knowledge needed in practically all parts of a Bayesian model should be recognized and consequently fully utilised in the process of model formulation.

Redox-linked proton transfer by cytochrome c oxidase

The respiratory chain is found in the inner mitochondrial membrane of higher organisms and in the plasma membrane of many bacteria. It consists of several membrane-spanning enzymes, which conserve the energy that is liberated from the degradation of food molecules as an electrochemical proton gradient across the membrane. The proton gradient can later be utilized by the cell for different energy requiring processes, e.g. ATP production, cellular motion or active transport of ions. The difference in proton concentration between the two sides of the membrane is a result of the translocation of protons by the enzymes of the respiratory chain, from the negatively charged (N-side) to the positively charged side (P-side) of the lipid bilayer, against the proton concentration gradient. The endergonic proton transfer is driven by the flow of electrons through the enzymes of the respiratory chain, from low redox-potential electron donors to acceptors of higher potential, and ultimately to oxygen. Cytochrome c oxidase is the last enzyme in the respiratory chain and catalyzes the reduction of dioxygen to water. The redox reaction is coupled to proton transport across the membrane by a yet unresolved mechanism. Cytochrome c oxidase has two proton-conducting pathways through which protons are taken up to the interior part of the enzyme from the N-side of the membrane. The K-pathway transfers merely substrate protons, which are consumed in the process of water formation at the catalytic site. The D-pathway transfers both substrate protons and protons that are pumped to the P-side of the membrane. This thesis focuses on the role of two conserved amino acids in proton translocation by cytochrome c oxidase, glutamate 278 and tryptophan 164. Glu278 is located at the end of the D-pathway and is thought to constitute the branching point for substrate and pumped protons. In this work, it was shown that although Glu278 has an important role in the proton transfer mechanism, its presence is not an obligatory requirement. Alternative structural solutions in the area around Glu278, much like the ones present in some distantly related heme-copper oxidases, could in the absence of Glu278 support the formation of a long hydrogen-bonded water chain through which proton transfer from the D-pathway to the catalytic site is possible. The other studied amino acid, Trp164, is hydrogen bonded to the ∆-propionate of heme a3 of the catalytic site. Mutation of this amino acid showed that it may be involved in regulation of proton access to a proton acceptor, a pump site, from which the proton later is expelled to the P-side of the membrane. The ion pair that is formed by the ∆-propionate of heme a3 and arginine 473 is likely to form a gate-like structure, which regulates proton mobility to the P-side of the membrane. The same gate may also be part of an exit path through which water molecules produced at the catalytically active site are removed towards the external side of the membrane. Time-resolved optical and electrometrical experiments with the Trp164 to phenylalanine mutant revealed a so far undetected step in the proton pumping mechanism. During the A to PR transition of the catalytic cycle, a proton is transferred from Glu278 to the pump site, located somewhere in the vicinity of the ∆-propionate of heme a3. A mechanism for proton pumping by cytochrome c oxidase is proposed on the basis of the presented results and the mechanism is discussed in relation to some relevant experimental data. A common proton pumping mechanism for all members of the heme-copper oxidase family is moreover considered.

Proton translocation coupled to electron transfer reactions in terminal oxidases

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

The role of phospholipid transfer protein and cholesteryl ester transfer protein in reverse cholesterol transport

In atherosclerosis, cholesterol accumulates in the vessel wall, mainly in the form of modified low-density lipoprotein (LDL). Macrophages of the vessel wall scavenge cholesterol, which leads to formation of lipid-laden foam cells. High plasma levels of high-density lipoprotein (HDL) protect against atherosclerosis, as HDL particles can remove peripheral cholesterol and transport it to the liver for excretion in a process called reverse cholesterol transport (RCT). Phospholipid transfer protein (PLTP) remodels HDL particles in the circulation, generating prebeta-HDL and large fused HDL particles. In addition, PLTP maintains plasma HDL levels by facilitating the transfer of post-lipolytic surface remnants of triglyceride-rich lipoproteins to HDL. Most of the cholesteryl ester transfer protein (CETP) in plasma is bound to HDL particles and CETP is also involved in the remodeling of HDL particles. CETP enhances the heteroexchange of cholesteryl esters in HDL particles for triglycerides in LDL and very low-density lipoprotein (VLDL). The aim of this thesis project was to study the importance of endogenous PLTP in the removal of cholesterol from macrophage foam cells by using macrophages derived from PLTP-deficient mice, determine the effect of macrophage-derived PLTP on the development of atherosclerosis by using bone marrow transplantation, and clarify the role of the two forms of PLTP, active and inactive, in the removal of cholesterol from the foam cells. In addition, the ability of CETP to protect HDL against the action of chymase was studied. Finally, cholesterol efflux potential of sera obtained from the study subjects was compared. The absence of PLTP in macrophages derived from PLTP-deficient mice decreased cholesterol efflux mediated by ATP-binding cassette transporter A1. The bone marrow transplantation studies showed that selective deficiency of PLTP in macrophages decreased the size of atherosclerotic lesions and caused major changes in serum lipoprotein levels. It was further demonstrated that the active form of PLTP can enhance cholesterol efflux from macrophage foam cells through generation of prebeta-HDL and large fused HDL particles enriched with apoE and phospholipids. Also CETP may enhance the RCT process, as association of CETP with reconstituted HDL particles prevented chymase-dependent proteolysis of these particles and preserved their cholesterol efflux potential. Finally, serum from high-HDL subjects promoted more efficient cholesterol efflux than did serum derived from low-HDL subjects which was most probably due to differences in the distribution of HDL subpopulations in low-HDL and high-HDL subjects. These studies described in this thesis contribute to the understanding of the PLTP/CETP-associated mechanisms underlying RCT.

New Evidence on the Properties of the Financial Statement Information Pricing Process

This study contributes to our knowledge of how information contained in financial statements is interpreted and priced by the stock market in two aspects. First, the empirical findings indicate that investors interpret some of the information contained in new financial statements in the context of the information of prior financial statements. Second, two central hypotheses offered in earlier literature to explain the significant connection between publicly available financial statement information and future abnormal returns, that the signals proxy for risk and that the information is priced with a delay, are evaluated utilizing a new methodology. It is found that the mentioned significant connection for some financial statement signals can be explained by that the signals proxy for risk and for other financial statement signals by that the information contained in the signals is priced with a delay.

The Influence of World Factors on Finnish Stock Market Volatility

This paper investigates to what extent the volatility of Finnish stock portfolios is transmitted through the "world volatility". We operationalize the volatility processes of Finnish leverage, industry, and size portfolio returns by asymmetric GARCH specifications according to Glosten et al. (1993). We use daily return data for January, 2, 1987 to December 30, 1998. We find that the world shock significantly enters the domestic models, and that the impact has increased over time. This applies also for the variance ratios, and the correlations to the world. The larger the firm, the larger is the world impact. The conditional variance is higher during recessions. The asymmetry parameter is surprisingly non-significant, and the leverage hypothesis cannot be verified. The return generating process of the domestic portfolio returns does usually not include the world information set, thus indicating that the returns are generated by a segmented conditional asset pricing model.