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.

Remote sensing of leaf area index: enhanced retrieval from close-range and remotely sensed optical observations

A wide range of models used in agriculture, ecology, carbon cycling, climate and other related studies require information on the amount of leaf material present in a given environment to correctly represent radiation, heat, momentum, water, and various gas exchanges with the overlying atmosphere or the underlying soil. Leaf area index (LAI) thus often features as a critical land surface variable in parameterisations of global and regional climate models, e.g., radiation uptake, precipitation interception, energy conversion, gas exchange and momentum, as all areas are substantially determined by the vegetation surface. Optical wavelengths of remote sensing are the common electromagnetic regions used for LAI estimations and generally for vegetation studies. The main purpose of this dissertation was to enhance the determination of LAI using close-range remote sensing (hemispherical photography), airborne remote sensing (high resolution colour and colour infrared imagery), and satellite remote sensing (high resolution SPOT 5 HRG imagery) optical observations. The commonly used light extinction models are applied at all levels of optical observations. For the sake of comparative analysis, LAI was further determined using statistical relationships between spectral vegetation index (SVI) and ground based LAI. The study areas of this dissertation focus on two regions, one located in Taita Hills, South-East Kenya characterised by tropical cloud forest and exotic plantations, and the other in Gatineau Park, Southern Quebec, Canada dominated by temperate hardwood forest. The sampling procedure of sky map of gap fraction and size from hemispherical photographs was proven to be one of the most crucial steps in the accurate determination of LAI. LAI and clumping index estimates were significantly affected by the variation of the size of sky segments for given zenith angle ranges. On sloping ground, gap fraction and size distributions present strong upslope/downslope asymmetry of foliage elements, and thus the correction and the sensitivity analysis for both LAI and clumping index computations were demonstrated. Several SVIs can be used for LAI mapping using empirical regression analysis provided that the sensitivities of SVIs at varying ranges of LAI are large enough. Large scale LAI inversion algorithms were demonstrated and were proven to be a considerably efficient alternative approach for LAI mapping. LAI can be estimated nonparametrically from the information contained solely in the remotely sensed dataset given that the upper-end (saturated SVI) value is accurately determined. However, further study is still required to devise a methodology as well as instrumentation to retrieve on-ground green leaf area index . Subsequently, the large scale LAI inversion algorithms presented in this work can be precisely validated. Finally, based on literature review and this dissertation, potential future research prospects and directions were recommended.

Identiteettien maisemat Saskatchewanin Uudessa Suomessa : Uudisasutuksesta uusidentifikaatioon

The present study examines how the landscape of the rural immigrant colony of New Finland (Saskatchewan, Canada) has reflected the Finnish origins of the about 350 settlers and their descendants, their changing ideologies, values, sense of collectiveness and the meanings of the Finnish roots. The study also reveals the reasons and power structures behind the ethnic expressions. Researched time period runs from the beginning of the settlement in 1888 to the turn of the millennium. The research concentrates on buildings, cemeteries, personal names and place names which contain strong visual and symbolic messages and are all important constituents of mundane landscapes. For example, the studied personal names are important identity-political indexes telling about the value of the Finnish nationalism, community spirit, dual Finnish-Canadian identities and also the process of assimilation which, for example, had differences between genders. The study is based on empirical field research, and iconographical and textual interpretations supported by classifications and comparative analyses. Several interviews and literature were essential means of understanding the changing political contexts which influenced the Finnish settlement and its multiple landscape representations. Five historical landscape periods were identified in New Finland. During these periods the meanings and representations of Finnish identity changed along with national and international politics and local power structures. For example, during the Second World War Canada discouraged representations of Finnish culture because Finland and Canada were enemies. But Canada s multicultural policy in the 1980s led to several material and symbolic representations indicating the Finnish settlement after a period of assimilation and deinstitutionalization. The study shows how these representations were indications of the politics of a (selective) memory. Especially Finnish language, cultural traditions and the Evangelical-Lutheran values of the pioneers, which have been passed down to new generations, are highly valued part of the Finnish heritage. Also the work of the pioneers and their participation in the building of Saskatchewan is an important collective narrative. The selectiveness of a memory created the landscape of forgetting which includes deliberately forgotten parts of the history. For example, the occasional disputes between the congregations are something that has been ignored. The results show how the different landscape elements can open up a useful perspective to diaspora colonies or other communities also by providing information which otherwise would be indistinguishable. In this case, for example, two cemeteries close together were a sign of religious distributions among the early settlers.

Benthic-pelagic coupling in the northern Baltic Sea: importance of bioturbation and benthic predation

Benthic-pelagic coupling describes processes that operate across and between the seafloor and open-water ecosystems. In soft-sediment communities, bioturbation by sediment-dwelling and epibenthic organisms may strongly shape habitat characteristics and influence processes, e.g. biogeochemical cycling, which supplies bioavailable nutrients to pelagic primary producers. In addition, benthic fauna may mediate benthic-pelagic coupling by affecting the survival and hatching of zooplankton dormant eggs in the sediment. In the shallow waters and seasonally fluctuating environment of the Baltic Sea, emergence from the seafloor essentially contributes to the dynamics of zooplankton pelagic populations. In this thesis, I examine how benthic organisms with different functional traits affect the link between the benthic and pelagic systems in the northern Baltic Sea. By means of experimental laboratory studies, the effects of sediment-dwelling (Monoporeia affinis, Macoma balthica and Marenzelleria spp.) and nectobenthic (Mysis spp.) taxa on the survival and hatching of zooplankton benthic eggs and on benthic nutrient fluxes and sediment structure were investigated. In the predation studies, the nectobenthic mysids Mysis spp. preyed upon benthic eggs of the cladoceran Bosmina longispina maritima (syn. B. coregoni maritima), both in pelagic and benthic environments. Of the sediment-dwelling species, the amphipod M. affinis and the bivalve M. balthica reduced the number of cladoceran eggs in the sediment, whereas the polychaetes Marenzelleria spp. had no effects on cladoceran eggs. Both M. balthica and M. affinis also increased the mortality rates of benthic eggs of copepods and rotifers. It was estimated that zooplankton eggs provide an additional carbon source for food-limited benthic communities. The results indicate that predation pressure on zooplankton benthic eggs may be strong, but varies widely depending on the season and the functional characteristics of the macrofauna. Macoma balthica buried cladoceran eggs and a fluorescent tracer from the sediment surface to a depth of 3 4 cm, indicating efficient sediment mixing. In contrast, the other taxa had fewer effects on particle distributions. In addition to organic matter mineralization, particle mixing is crucial to the success of benthic recruitment of zooplankton, since only eggs close to the sediment surface may hatch. Macoma balthica and M. affinis altered the patterns of zooplankton emergence from the sediment. In general, the highest emergence rates were observed in the absence of macroscopic fauna, and M. balthica exerted a stronger suppressive effect than M. affinis. Moreover, copepods were less severely affected than cladocerans, while only one species (Temora longicornis) clearly benefited from the presence of the macrofauna. These differences probably result from species-specific differences in the resistance of eggs to disturbances. The results show that benthic fauna may considerably alter the patterns of zooplankton emergence from the seafloor, thereby shaping zooplankton pelagic populations. The semi-motile M. balthica and Marenzelleria spp. increased the fluxes of phosphate and ammonium from the sediment to the water, whereas the motile M. affinis and Mysis mixta had a contrasting effect. In the eutrophied Baltic Sea, efficient internal cycling of bioavailable nutrients forms a strong feedback inhibiting the recovery of the ecosystem. Based on the results, a change in species dominance from the two motile taxa, susceptible to oxygen deficiency, to the more tolerant semi-motile taxa provides additional feedback, strengthening internal nutrient cycling and accelerating eutrophication, with deteriorating near-bottom oxygen conditions and changes in the benthic communities. In shallow-water ecosystems, benthic nutrient regeneration plays a key role in determining the overall productivity of the ecosystem. In addition, the results of this study show that the communities in the benthos may essentially contribute to the structure of those in the plankton.

Phytoplankton ecology of subarctic lakes in Finnish Lapland

Climate is warming and it is especially seen in arctic areas, where the warming trend is expected to be greatest. Arctic freshwater ecosystems, which are a very characteristic feature of the arctic landscape, are especially sensitive to climate change. They could be used as early warning systems, but more information about the ecosystem functioning and responses are needed for proper interpretation of the observations. Phytoplankton species and assemblages could be especially suitable for climate-related studies, since they have short generation times and react rapidly to changes in the environment. In addition, phytoplankton provides a good tool for lake classifications, since different species have different requirements and tolerance ranges for various environmental factors. The use of biological indicators is especially useful in arctic areas, were many of the chemical factors commonly fall under the detection limit and therefore do not provide much information about the environment. This work brings new information about species distribution and dynamics of arctic freshwater phytoplankton in relation to environmental factors. The phytoplankton of lakes in Finnish Lapland and other European high-altitude or high-latitude areas were compared. Most lakes were oligotrophic and dominated by flagellated species belonging to chrysophytes, cryptophytes and dinoflagellates. In Finnish Lapland cryptophytes were of less importance, whereas desmids had high species richness in many of the lakes. In Pan-European scale, geographical and catchment-related factors were explaining most of the differences in species distributions between different districts, whereas lake water chemistry (especially conductivity, SiO2 and pH) was most important regionally. Seasonal and interannual variation of phytoplankton was studied in subarctic Lake Saanajärvi. Characteristic phytoplankton species in this oligotrophic, dimictic lake belonged mainly to chrysophytes and diatoms. The maximum phytoplankton biomass in Lake Saanajärvi occurs during autumn, while spring biomass is very low. During years with heavy snow cover the lake suffers from pH drop caused by melt waters, but the effects of this acid pulse are restricted to surface layers and last for a relatively short period. In addition to some chemical parameters (mainly Ca and nutrients), length of the mixing cycle and physical factors such as lake water temperature and thermal stability of water column had major impact on phytoplankton dynamics. During a year with long and strong thermal stability, the phytoplankton community developed towards an equilibrium state, with heavy dominance of only a few taxa for a longer period of time. During a year with higher windiness and less thermal stability, the species composition was more diverse and species with different functional strategies were able to occur simultaneously. The results of this work indicate that although arctic lakes in general share many common features concerning their catchment and water chemistry, large differences in biological features can be found even in a relatively small area. Most likely the lakes with very different algal flora do not respond in a similar way to differences in the environmental factors, and more information about specific arctic lake types is needed. The results also show considerable year to year differences in phytoplankton species distribution and dynamics, and these changes are most likely linked to climatic factors.

Heavy-light mesons on a lattice

Several excited states of Ds and Bs mesons have been discovered in the last six years: BaBar, Cleo and Belle discovered the very narrow states D(s0)*(2317)+- and D(s1)(2460)+- in 2003, and CDF and DO Collaborations reported the observation of two narrow Bs resonances, B(s1)(5830)0 and B*(s2)(5840)0 in 2007. To keep up with experiment, meson excited states should be studied from the theoretical aspect as well. The theory that describes the interaction between quarks and gluons is quantum chromodynamics (QCD). In this thesis the properties of the meson states are studied using the discretized version of the theory - lattice QCD. This allows us to perform QCD calculations from first principles, and "measure" not just energies but also the radial distributions of the states on the lattice. This gives valuable theoretical information on the excited states, as we can extract the energy spectrum of a static-light meson up to D wave states (states with orbital angular momentum L=2). We are thus able to predict where some of the excited meson states should lie. We also pay special attention to the order of the states, to detect possible inverted spin multiplets in the meson spectrum, as predicted by H. Schnitzer in 1978. This inversion is connected to the confining potential of the strong interaction. The lattice simulations can also help us understand the strong interaction better, as the lattice data can be treated as "experimental" data and used in testing potential models. In this thesis an attempt is made to explain the energies and radial distributions in terms of a potential model based on a one-body Dirac equation. The aim is to get more information about the nature of the confining potential, as well as to test how well the one-gluon exchange potential explains the short range part of the interaction.

Studies of the star-forming structures in the dense interstellar medium: a view by dust extinction

New stars in galaxies form in dense, molecular clouds of the interstellar medium. Measuring how the mass is distributed in these clouds is of crucial importance for the current theories of star formation. This is because several open issues in them, such as the strength of different mechanism regulating star formation and the origin of stellar masses, can be addressed using detailed information on the cloud structure. Unfortunately, quantifying the mass distribution in molecular clouds accurately over a wide spatial and dynamical range is a fundamental problem in the modern astrophysics. This thesis presents studies examining the structure of dense molecular clouds and the distribution of mass in them, with the emphasis on nearby clouds that are sites of low-mass star formation. In particular, this thesis concentrates on investigating the mass distributions using the near infrared dust extinction mapping technique. In this technique, the gas column densities towards molecular clouds are determined by examining radiation from the stars that shine through the clouds. In addition, the thesis examines the feasibility of using a similar technique to derive the masses of molecular clouds in nearby external galaxies. The papers presented in this thesis demonstrate how the near infrared dust extinction mapping technique can be used to extract detailed information on the mass distribution in nearby molecular clouds. Furthermore, such information is used to examine characteristics crucial for the star formation in the clouds. Regarding the use of extinction mapping technique in nearby galaxies, the papers of this thesis show that deriving the masses of molecular clouds using the technique suffers from strong biases. However, it is shown that some structural properties can still be examined with the technique.

Canopy processes, fluxes and microclimate in a pine forest

Interaction between forests and the atmosphere occurs by radiative and turbulent transport. The fluxes of energy and mass between surface and the atmosphere directly influence the properties of the lower atmosphere and in longer time scales the global climate. Boreal forest ecosystems are central in the global climate system, and its responses to human activities, because they are significant sources and sinks of greenhouse gases and of aerosol particles. The aim of the present work was to improve our understanding on the existing interplay between biologically active canopy, microenvironment and turbulent flow and quantify. In specific, the aim was to quantify the contribution of different canopy layers to whole forest fluxes. For this purpose, long-term micrometeorological and ecological measurements made in a Scots pine (Pinus sylvestris) forest at SMEAR II research station in Southern Finland were used. The properties of turbulent flow are strongly modified by the interaction between the canopy elements: momentum is efficiently absorbed in the upper layers of the canopy, mean wind speed and turbulence intensities decrease rapidly towards the forest floor and power spectra is modulated by spectral short-cut . In the relative open forest, diabatic stability above the canopy explained much of the changes in velocity statistics within the canopy except in strongly stable stratification. Large eddies, ranging from tens to hundred meters in size, were responsible for the major fraction of turbulent transport between a forest and the atmosphere. Because of this, the eddy-covariance (EC) method proved to be successful for measuring energy and mass exchange inside a forest canopy with exception of strongly stable conditions. Vertical variations of within canopy microclimate, light attenuation in particular, affect strongly the assimilation and transpiration rates. According to model simulations, assimilation rate decreases with height more rapidly than stomatal conductance (gs) and transpiration and, consequently, the vertical source-sink distributions for carbon dioxide (CO2) and water vapor (H2O) diverge. Upscaling from a shoot scale to canopy scale was found to be sensitive to chosen stomatal control description. The upscaled canopy level CO2 fluxes can vary as much as 15 % and H2O fluxes 30 % even if the gs models are calibrated against same leaf-level dataset. A pine forest has distinct overstory and understory layers, which both contribute significantly to canopy scale fluxes. The forest floor vegetation and soil accounted between 18 and 25 % of evapotranspiration and between 10 and 20 % of sensible heat exchange. Forest floor was also an important deposition surface for aerosol particles; between 10 and 35 % of dry deposition of particles within size range 10 30 nm occurred there. Because of the northern latitudes, seasonal cycle of climatic factors strongly influence the surface fluxes. Besides the seasonal constraints, partitioning of available energy to sensible and latent heat depends, through stomatal control, on the physiological state of the vegetation. In spring, available energy is consumed mainly as sensible heat and latent heat flux peaked about two months later, in July August. On the other hand, annual evapotranspiration remains rather stable over range of environmental conditions and thus any increase of accumulated radiation affects primarily the sensible heat exchange. Finally, autumn temperature had strong effect on ecosystem respiration but its influence on photosynthetic CO2 uptake was restricted by low radiation levels. Therefore, the projected autumn warming in the coming decades will presumably reduce the positive effects of earlier spring recovery in terms of carbon uptake potential of boreal forests.

Strong Evidence for ZZ Production in pp̅ Collisions at √s=1.96 TeV

We report the first measurement of the cross section for Z boson pair production at a hadron collider. This result is based on a data sample corresponding to 1.9 fb-1 of integrated luminosity from ppbar collisions at sqrt{s} = 1.96 TeV collected with the CDF II detector at the Fermilab Tevatron. In the llll channel, we observe three ZZ candidates with an expected background of 0.096^{+0.092}_{-0.063} events. In the llnunu channel, we use a leading-order calculation of the relative ZZ and WW event probabilities to discriminate between signal and background. In the combination of llll and llnunu channels, we observe an excess of events with a probability of $5.1\times 10^{-6}$ to be due to the expected background. This corresponds to a significance of 4.4 standard deviations. The measured cross section is sigma(ppbar -> ZZ) = 1.4^{+0.7}_{-0.6} (stat.+syst.) pb, consistent with the standard model expectation.

Transverse momentum and pseudorapidity distributions of charged hadrons in pp collisions at sqrt(s) = 0.9 and 2.36 TeV

Measurements of inclusive charged-hadron transverse-momentum and pseudorapidity distributions are presented for proton-proton collisions at sqrt(s) = 0.9 and 2.36 TeV. The data were collected with the CMS detector during the LHC commissioning in December 2009. For non-single-diffractive interactions, the average charged-hadron transverse momentum is measured to be 0.46 +/- 0.01 (stat.) +/- 0.01 (syst.) GeV/c at 0.9 TeV and 0.50 +/- 0.01 (stat.) +/- 0.01 (syst.) GeV/c at 2.36 TeV, for pseudorapidities between -2.4 and +2.4. At these energies, the measured pseudorapidity densities in the central region, dN(charged)/d(eta) for |eta|

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.

Modeling and Forecasting Implied Volatility: Implications for Trading, Pricing, and Risk Management

Modeling and forecasting of implied volatility (IV) is important to both practitioners and academics, especially in trading, pricing, hedging, and risk management activities, all of which require an accurate volatility. However, it has become challenging since the 1987 stock market crash, as implied volatilities (IVs) recovered from stock index options present two patterns: volatility smirk(skew) and volatility term-structure, if the two are examined at the same time, presents a rich implied volatility surface (IVS). This implies that the assumptions behind the Black-Scholes (1973) model do not hold empirically, as asset prices are mostly influenced by many underlying risk factors. This thesis, consists of four essays, is modeling and forecasting implied volatility in the presence of options markets’ empirical regularities. The first essay is modeling the dynamics IVS, it extends the Dumas, Fleming and Whaley (DFW) (1998) framework; for instance, using moneyness in the implied forward price and OTM put-call options on the FTSE100 index, a nonlinear optimization is used to estimate different models and thereby produce rich, smooth IVSs. Here, the constant-volatility model fails to explain the variations in the rich IVS. Next, it is found that three factors can explain about 69-88% of the variance in the IVS. Of this, on average, 56% is explained by the level factor, 15% by the term-structure factor, and the additional 7% by the jump-fear factor. The second essay proposes a quantile regression model for modeling contemporaneous asymmetric return-volatility relationship, which is the generalization of Hibbert et al. (2008) model. The results show strong negative asymmetric return-volatility relationship at various quantiles of IV distributions, it is monotonically increasing when moving from the median quantile to the uppermost quantile (i.e., 95%); therefore, OLS underestimates this relationship at upper quantiles. Additionally, the asymmetric relationship is more pronounced with the smirk (skew) adjusted volatility index measure in comparison to the old volatility index measure. Nonetheless, the volatility indices are ranked in terms of asymmetric volatility as follows: VIX, VSTOXX, VDAX, and VXN. The third essay examines the information content of the new-VDAX volatility index to forecast daily Value-at-Risk (VaR) estimates and compares its VaR forecasts with the forecasts of the Filtered Historical Simulation and RiskMetrics. All daily VaR models are then backtested from 1992-2009 using unconditional, independence, conditional coverage, and quadratic-score tests. It is found that the VDAX subsumes almost all information required for the volatility of daily VaR forecasts for a portfolio of the DAX30 index; implied-VaR models outperform all other VaR models. The fourth essay models the risk factors driving the swaption IVs. It is found that three factors can explain 94-97% of the variation in each of the EUR, USD, and GBP swaption IVs. There are significant linkages across factors, and bi-directional causality is at work between the factors implied by EUR and USD swaption IVs. Furthermore, the factors implied by EUR and USD IVs respond to each others’ shocks; however, surprisingly, GBP does not affect them. Second, the string market model calibration results show it can efficiently reproduce (or forecast) the volatility surface for each of the swaptions markets.

Essays on Stock Options, Incentives, and Managerial Action

Executive compensation and managerial behavior have received an increasing amount of attention in the financial economics literature since the mid 1970s. The purpose of this thesis is to extend our understanding of managerial compensation, especially how stock option compensation is linked to the actions undertaken by the management. Furthermore, managerial compensation is continuously and heatedly debated in the media and an emerging consensus from this discussion seems to be that there still exists gaps in our knowledge of optimal contracting. In Finland, the first executive stock options were introduced in the 1980s and throughout the last 15 years it has become increasingly popular for Finnish listed firms to use this type of managerial compensation. The empirical work in the thesis is conducted using data from Finland, in contrast to most previous studies that predominantly use U.S. data. Using Finnish data provides insight of how market conditions affect compensation and managerial action and provides an opportunity to explore what parts of the U.S. evidence can be generalized to other markets. The thesis consists of four essays. The first essay investigates the exercise policy of the executive stock option holders in Finland. In summary, Essay 1 contributes to our understanding of the exercise policies by examining both the determinants of the exercise decision and the markets reaction to the actual exercises. The second essay analyzes the factors driving stock option grants using data for Finnish publicly listed firms. Several agency theory based variables are found to have have explanatory power on the likelihood of a stock option grant. Essay 2 also contributes to our understanding of behavioral factors, such as prior stock return, as determinants of stock option compensation. The third essay investigates the tax and stock option motives for share repurchases and dividend distributions. We document strong support for the tax motive for share repurchases. Furthermore, we also analyze the dividend distribution decision in companies with stock options and find a significant difference between companies with and without dividend protected options. We thus document that the cutting of dividends found in previous U.S. studies can be avoided by dividend protection. In the fourth essay we approach the puzzle of negative skewness in stock returns from an altogether different angle than in previous studies. We suggest that negative skewness in stock returns is generated by management disclosure practices and find proof for this. More specifically, we find that negative skewness in daily returns is induced by returns for days when non-scheduled firm specific news is disclosed.