Basel III -implementointi: Empiirinen tutkimus

Tutkielman tavoitteena oli tarkastella, miten uusi Basel III -säännöstö implementoidaan pankkeihin. Käsittelyssä verrattiin Basel III -säännöstön tuomia muutoksia vielä voimassa olevaan Basel II -kehikkoon. Aiheeseen syvennyttiin muutoksen näkökulmasta tarkastelemalla muutoksen käyttöönottoa organisaatiossa. Lisäksi käytiin läpi sisäisen valvonnan roolia osana implementointiprosessia. Empiirisessä osiossa aihetta tarkasteltiin kohdefinanssiryhmän näkökulmasta. Aineistonhankintamenetelmänä käytettiin puolistrukturoitua haastattelua ja tutkimus sisältää piirteitä myös tapaustutkimuksesta. Basel III -säännöstö edellyttää pankeilta enemmän omia varoja suhteessa niiden riskipainotettuihin saamisiin. Tällä on tarkoitus vahvistaa pankkeja ja korjata Basel II -kehikon puutteita, jotka ilmenivät finanssikriisissä 2007–2009. Tarkasteltaessa muutosten vaikutuksia koko kohdefinanssiryhmään asettavat uudet likviditeettivaatimukset implementoinnille suurimmat haasteet, kun taas ryhmän pankit kiinnittävät huomiota enemmän talletushankintaan. Basel III -säännöstön implementoinnin vaatimat muutokset toteutetaan finanssiryhmässä vaiheittain ja eri viestintäkanavia hyödyntäen. Sisäinen valvonta varmistaa säännösten käyttöönoton ja noudattamisen.

Testate amoebae (thecamoebians) as indicators of aquatic mine impact

The environmental impacts of a single mine often remain local, but acidic and metal-rich acid mine drainage (AMD) from the waste materials may pose a serious threat to adjacent surface waters and their ecosystems. Testate amoebae (thecamoebian) analysis was used together with lake sediment geochemistry to study and evaluate the ecological effects of sulphidic metal mines on aquatic environments. Three different mines were included in the study: Luikonlahti Cu-mine in Kaavi, eastern Finland, Haveri Cu-Au mine in Ylöjärvi, southern Finland and Pyhäsalmi Zn-Cu-S mine in Pyhäjärvi, central Finland. Luikonlahti and Haveri are closed mines, but Pyhäsalmi is still operating. The sampling strategy was case specific, and planned to provide a representative sediment sample series to define natural background conditions, to detect spatial and temporal variations in mine impacts, to evaluate the possible recovery after the peak contamination, and to distinguish the effects of other environmental factors from the mining impacts. In the Haveri case, diatom analyses were performed alongside thecamoebian analysis to evaluate the similarities and differences between the two proxies. The results of the analyses were investigated with multivariate methods (direct and indirect ordinations, diversity and distance measure indices). Finally, the results of each case study were harmonized, pooled, and jointly analyzed to summarize the results for this dissertation. Geochemical results showed broadly similar temporal patterns in each case. Concentrations of ions in the pre-disturbance samples defined the natural baseline against which other results were compared. The beginning of the mining activities had only minor impacts on sediment geochemistry, mainly appearing as an increased clastic input into the lakes at Haveri and Pyhäsalmi. The active mining phase was followed by the metallic contamination and, subsequently, by the most recent change towards decreased but still elevated metal concentrations in the sediments. Because of the delay in the oxidation of waste material and formation of AMD, the most intense, but transient metal contamination phase occurred in the post-mining period at Luikonlahti and Haveri. At Pyhäsalmi, the highest metal contamination preceded effluent mitigation actions. Spatial gradients were observed besides the temporal evolution in both the pre-disturbance and mine-impacted samples from Luikonlahti and Pyhäsalmi. The geochemical gradients varied with distance from the main source of contaminants (dispersion and dilution) and with water depth (redox and pH). The spatial extent of the highest metal contamination associated with these mines remained rather limited. At Haveri, the metallic impact was widespread, with the upstream site in another lake basin found to be contaminated. Changes in thecamoebian assemblages corresponded well with the geochemical results. Despite some differences, the general features and ecological responses of the faunal assemblages were rather similar in each lake. Constantly abundant strains of Difflugia oblonga, Difflugia protaeiformis and centropyxids formed the core of these assemblages. Increasing proportions of Cucurbitella tricuspis towards the surface samples were found in all of the cases. The results affirmed the indicator value of some already known indicator forms, but such as C. tricuspis and higher nutrient levels, but also elicited possible new ones such as D. oblonga ‘spinosa’ and clayey substrate, high conductivity and/or alkalinity, D. protaeiformis ‘multicornis’ and pH, water hardness and the amount of clastic material and Centropyxis constricta ‘aerophila’ and high metal and S concentrations. In each case, eutrophication appeared to be the most important environmental factor, masking the effects of other variables. Faunal responses to high metal inputs in sediments remained minor, but were nevertheless detectable. Besides the trophic state of the lake, numerical methods suggested overall geochemical conditions (pH, redox) to be the most important factor at Luikonlahti, whereas the Haveri results showed the clearest connection between metals and amoebae. At Pyhäsalmi, the strongest relationships were found between Ca- and S-rich present loading, redox conditions and substrate composition. Sediment geochemistry and testate amoeba analysis proved to be a suitable combination of methods to detect and describe the aquatic mine impacts in each specific case, to evaluate recovery and to differentiate between the effects of different anthropogenic and natural environmental factors. It was also suggested that aquatic mine impacts can be significantly mitigated by careful design and after-care of the waste facilities, especially by reducing and preventing AMD. The case-specific approach is nevertheless necessary because of the unique characteristics of each mine and variations in the environmental background conditions.

Towards Inter-organizational Working Capital Management

Working capital is an investment which is tied up into the inventories and accounts receivable and which is released with accounts payable. Due to the current business landscape with tightened financial conditions and finance markets, organizations emphasize efficient working capital management. With efficient working capital management, a company can reduce the need of finance, free up cash, increase profitability, improve liquidity, increase the efficiency of operations, and decrease (financing) costs. From the perspective of an individual company, efficient working capital management means decreasing inventory levels by shortening the cycle time of inventories, decreasing accounts receivable by shortening the trade credit terms and effective collection procedures, and increasing the level of accounts payable by paying the suppliers later. From an inter-organizational perspective, however, working capital should not be sub-optimized by a single company but holistic view to working capital management through the supply chain should be adopted to create value and improve performance together. The purpose of this research is to take academic research as well as practical management towards inter-organizational working capital management. The thesis discusses the benefits as well as mechanisms of working capital management in the inter-organizational context and has two main objectives: (1) to examine the effect of inter-organizational working capital management on performance in the value chain context and (2) to develop models of working capital management for internal as well as inter-organizational value chains. The results of the archival research conducted in the value chain of the pulp and paper industry and the value chain of the automotive industry indicate that companies can increase relative profitability by managing working capital comprehensively by taking into account all three components, and holistically though the value chain. Companies in the value chain benefit from different strategies in working capital management depending on the position of the company in the value chain. This can be taken into account in inter-organizational working capital management. The effects of inter-organizational working capital management actions on the financing costs of working capital were studied via simulations. Simulations also show that the value chain and individual companies benefit from an inter-organizational view to working capital management. Inter-organizational working capital management actions include for example: shortening the cycle time of inventories, reducing product costs, shifting inventories, shortening payment terms, and considering the cost of capital. The thesis also provides solutions for the practical requirements for tools to control working capital. The design science part of the research introduces the adjusted cash conversion cycle (ACCC) model for internal value chains, as well as models for working capital management in the inter-organizational value chain context: the working capital management model (WCMM) and the financial cycle time model (FCTM) designed in corporation and product levels respectively. This research contributes to literature on working capital management and interorganizational accounting. The research gives a holistic, inter-organizational view to the management of working capital. It advances the knowledge in working capital management on operational level, increases knowledge in the recently risen theme of supply chainoriented, collaborative working capital management, combines management accounting research with supply chain management research, and contributes to the demand of practical inter-organizational accounting methods. In addition, the research has strong practical focus as new managerial methods are introduced.

The Anchoring Bias of Investors and the 52-Week High Momentum Strategy in the OMX Helsinki Stock Exchange: Psychological Approach to Market Efficiency

The behavioural finance literature expects systematic and significant deviations from efficiency to persist in securities markets due to behavioural and cognitive biases of investors. These behavioural models attempt to explain the coexistence of intermediate-term momentum and long-term reversals in stock returns based on the systematic violations of rational behaviour of investors. The study investigates the anchoring bias of investors and the profitability of the 52-week momentum strategy (GH henceforward). The relatively highly volatile OMX Helsinki stock exchange is a suitable market for examining the momentum effect, since international investors tend to realise their positions first from the furthest security markets by the time of market turbulence. Empirical data is collected from Thomson Reuters Datastream and the OMX Nordic website. The objective of the study is to provide a throughout research by formulating a self-financing GH momentum portfolio. First, the seasonality of the strategy is examined by taking the January effect into account and researching abnormal returns in long-term. The results indicate that the GH strategy is subject to significantly negative revenues in January, but the strategy is not prone to reversals in long-term. Then the predictive proxies of momentum returns are investigated in terms of acquisition prices and 52-week high statistics as anchors. The results show that the acquisition prices do not have explanatory power over the GH strategy’s abnormal returns. Finally, the efficacy of the GH strategy is examined after taking transaction costs into account, finding that the robust abnormal returns remain statistically significant despite the transaction costs. As a conclusion, the relative distance between a stock’s current price and its 52-week high statistic explains the profits of momentum investing to a high degree. The results indicate that intermediateterm momentum and long-term reversals are separate phenomena. This presents a challenge to current behavioural theories, which model these aspects of stock returns as subsequent components of how securities markets respond to relevant information.

The Use of Data Envelopment Analysis as Equity Portfolio Selection Criterion in the Finnish Stock Market

This thesis examines the application of data envelopment analysis as an equity portfolio selection criterion in the Finnish stock market during period 2001-2011. A sample of publicly traded firms in the Helsinki Stock Exchange is examined in this thesis. The sample covers the majority of the publicly traded firms in the Helsinki Stock Exchange. Data envelopment analysis is used to determine the efficiency of firms using a set of input and output financial parameters. The set of financial parameters consist of asset utilization, liquidity, capital structure, growth, valuation and profitability measures. The firms are divided into artificial industry categories, because of the industry-specific nature of the input and output parameters. Comparable portfolios are formed inside the industry category according to the efficiency scores given by the DEA and the performance of the portfolios is evaluated with several measures. The empirical evidence of this thesis suggests that with certain limitations, data envelopment analysis can successfully be used as portfolio selection criterion in the Finnish stock market when the portfolios are rebalanced at annual frequency according to the efficiency scores given by the data envelopment analysis. However, when the portfolios were rebalanced every two or three years, the results are mixed and inconclusive.

Vakavaraisuussääntelyn muutosten vaikutukset paikallispankille

Tutkielman tavoitteena on selvittää muuttuvan pankkisääntelyn vaikutukset vähittäispankkitoimintaa harjoittavalle paikallispankille vakavaraisuuden näkökulmasta. Vaikutuksia vakavaraisuuteen mitataan luottoriskin osalta, sen muodostaessa merkittävimmän osan kohdepankin vakavaraisuusvaatimuksesta. Tarkoituksena on selvittää käytössä olevan standardimenetelmän ja vaihtoehtoisen sisäisten luottoluokitusten menetelmän erot luottoriskin mittaamisessa ja vaikutukset vakavaraisuuteen sekä Basel II että Basel III-säännöksillä mitattuina. Tutkielmassa huomioidaan myös Basel III -säännöksen mukaiset uudet sääntelyinstrumentit ja analysoidaan niiden vaikutusta liiketoimintaan. Sekä Basel II että Basel III -säännöksellä mitattuna sisäisten luottoluokitusten menetelmä paransi kohdepankin vakavaraisuutta. Basel III -säännöksen suurimmat vaikutukset kohdistuivat kohdepankilla omien varojen laatuvaatimuksiin, jotka heikensivät vakavaraisuutta. Laatuvaatimuksista ja nousseista pääomavaatimuksista huolimatta kohdepankin vakavaraisuus säilyi hyvällä ja vaatimukset ylittävällä tasolla. Uusien sääntelyinstrumenttien vaatimukset täyttyivät nykyisellä taserakenteella vähimmäisomavaraisuusasteen ja pysyvän varainhankinnan vaatimuksen osalta. Maksuvalmiusvaatimuksen täyttämiseksi sijoitussalkkuun pitää tehdä muutoksia, minkä odotetaan vaikuttavan heikentävästi kohdepankin tulokseen.

Suomalaisten pienten ja keskisuurten osakeyhtiöiden konkurssin ennustaminen tilinpäätöstietojen avulla

Tämän tutkimuksen tavoitteena on selvittää, voidaanko yritysten tilinpäätöstiedoista löytää sellaisia muuttujia, jotka pystyvät ennustamaan yritysten konkursseja ja onko yrityksen kannattavuudella, vakavaraisuudella ja maksuvalmiudella kaikilla yhtä suuri merkitys konkurssin ennustamisessa. Lisäksi tavoitteena on verrata mitkä eri muuttujat selittävät konkurssia eri vuosina. Tutkimus toteutetaan luomalla viidelle vuodelle ennen konkurssia ennustusmallit käyttäen logistista regressiota. Tutkimus on rajattu koskemaan suomalaisia pieniä ja keskisuuria osakeyhtiöitä. Tutkimuksessa käytetty aineisto koostuu vuonna 2012 konkurssiin menneistä yrityksistä ja näille satunnaisotannalla valituista toimivista vertailuyrityksistä. Tutkimuksesta on rajattu pois nuoret, alle neljä vuotta toimineet yritykset, koska näiden konkurssiprosessit eroavat jo pidemmän aikaa toimineiden yritysten konkursseista.

Yritystoiminnan rahoitusriskit – Case: Talvivaara

Tässä kandidaatintutkielmassa selvitetään, minkälaisia rahoitusriskejä yritystoimintaan liittyy ja miten riskejä vastaan on mahdollista suojautua. Tutkielman case osassa analysoidaan Talvivaaran Kaivososakeyhtiö Oyj:n rahoitusriskejä ja Talvivaaran käyttämiä suojautumiskeinoja

Kestävyysstrategioiden arviointi pk-yrityksissä

Yrityksien vastuullinen liiketoiminta ja kestävä kehitys ovat nousseet esille sekä julkisessa keskustelussa että tieteellisessä tutkimuksessa. Tehty tutkimus on painottunut suuryrityksiin ja eri viitekehykset ja työkalut on luotu suuryrityksien näkökulmasta. Kuitenkin suurten ja pk-yritysten toiminta eroaa huomattavasti toisistaan, minkä vuoksi erilaiset mallit ei ole suoraan sovellettavissa pk-yrityksille. Tämä diplomityö pyrkii vastaamaan tähän ongelmaan tarkastelemalla kestävyyttä pk-yrityksien näkökulmasta. Tutkimuksen tavoitteena on arvioida, miten kestävyys näkyy pk-yrityksien toiminnassa sekä pohtia, miten kestävien strategioiden syntymistä saadaan edistettyä. Tutkimus koostuu kirjallisuustutkimuksena tehdystä teoriakatsauksesta sekä empiirisestä osuudesta, joka pohjautuu haastatteluihin sekä kyselytutkimukseen. Tarkastelun tuloksena muodostuu ymmärrys siitä, miten kestävyys ilmenee pk-yrityksissä ja miten pk-yrityksien ominaispiirteet vaikuttavat kestävyyden huomioimiseen. Tulokset osoittavat, että kirjallisuudesta tunnistetut kestävyysstrategiatyypittelyt ovat sovellettavissa suomalaisiin pk-yrityksiin, mutta selvää rajaa kestävyysstrategiatyyppien välille on vaikea vetää. Samassa yrityksessä voi olla tunnistettavissa useita strategiatyyppejä riippuen tarkasteltavasta osa-alueesta. Pk-yrityksissä kestävyyden huomioimiseen vaikuttavat merkittävästi myös niiden ominaispiirteet, mitkä erottavat pk-yritykset suuryrityksistä. Merkittävimmiksi ominaispiirteiksi tässä tutkimuksessa tunnistettiin omistajien asenteet, likviditeettiongelmat, resurssien sekä tiedon ja osaamisen vähyys.

Vertaileva tutkimus suomalaisten päivittäistavara kaupan alan yritysten likviditeetin hallinnasta vuosina 2009 - 2013

Tämän Pro gradu -tutkielman aiheena on tutkia suomalaisten päivittäistavarakaupan alan yritysten likviditeetin hallintaa vuosina 2009 - 2013. Tutkielmassa tutkitaan, millä tavalla suomalaisten päivittäistavarakaupan alan yritysten käyttöpääoman hallinta on muuttunut rajatulla ajanjaksolla. Lisäksi työssä tutkitaan millä tavoin valikoitujen yritysten kannattavuus, maksuvalmius ja vakavaraisuus ovat muuttuneet vuosina 2009 - 2013. Tutkimuksessa tarkastellaan myös, miten suomalainen päivittäistavarakauppa on kehittynyt tarkasteluajanjaksolla. Tutkimus on rajattu koskemaan neljää suurinta suomalaista päivittäistavarakaupan, pois lukien Lild Suomi Ky taloudellisten tietojen puuttumisen takia, alan ryhmittymää käyttäen kriteerinä vuoden 2013 päivittäistavaramyyntiä sekä markkinaosuuksia. Edellä mainittujen kriteerien perusteella tutkimukseen valikoitui seuraavat ryhmittymät: S-ryhmä, K-ryhmä, Suomen Lähikauppa Oy sekä Stockmann Oyj Abp.Teoriapohjaan tutkimuksessa käytetään aikaisempaa kirjallisuutta ja julkaistuja akateemisia tutkimuksia toimitusketjun ja sen hallinnasta, sekä käyttöpääomasta ja sen hallinnasta. Valikoitujen yritysten tilinpäätöstiedot on koottu Virre -tietokannasta ja toimiala tiedot tilastokeskuksen ohjelmalla PC -Axis 2008. Tutkimuksessa havaittiin käyttöpääomaprosentin ja quick ratio - tunnusluvun välillä pieniä yhtymäkohtia. Kun käyttöpääomaprosentti pienenee, quick ratio -tunnusluku paranee. Käyttöpääomaprosentin muutoksilla oli negatiivinen korrelaatio koko pääoman tuottoprosenttiin sekä liikevoittoprosenttiin. Tutkimuksen kohdeyritykset ovat pystyneet pitämään käyttöpääomaprosentin erilaisilla tehostamistoiminnoilla hyvin tasaisena tiukasta taloustilanteesta huolimatta.

The Determinants of Financial Leverage of Large Publicly Listed Companies - Evidence from Nordic Telecom Sector

This thesis examines the determinants of financial leverage ratio of large publicly listed companies within Nordic Telecom sector. The study is done as a case study and it covers 5 case companies headquartered in Nordic countries during period of 2002 - 2014 and by using restated values of quarterly observations from each case company’s interim reports. The chosen hypotheses are tested with multiple linear regressions firm by firm. The Findings of the study showed that uniqueness of Telecom sector and the region of our sample could not provide us unequivocal determinants of leverage ratio within the sector. However, e.g. Pecking order theory’s statement of Liquidity was widely confirmed by 3 out of 5 case companies which is worth to be taken into account in the big picture. The findings also showed that theories and earlier empirical evidence are confirmed by our case companies individually and non-systematically. Though Telecom sector is considered as quite unique industry and we did not discover absolute common relationships that would have held through all the Nordic case companies, we got unique and valuable evidence to conduct the research of this sector in future.

Käyttöpääoman mittaaminen ja hallinta valmistavassa teollisuusyrityksessä

Diplomityön päätavoitteena on vapauttaa pääomaa kohdeyrityksen käyttöpääoman komponenteista tuottavia investointeja varten. Tutkimus on toteutettu konstruktiivisena case-tutkimuksena. Aineistona on tieteellisen kirjallisuuden lisäksi käytetty tilinpäätösraportteja, tuotannossa käytettävien komponenttien ja valmistettavien tuotteiden tuote- ja tuoteryhmäkohtaisia tietoja sekä yrityksen avainhenkilöiden haastatteluja. Kysynnän epävarmuus ja liiketoiminnan kausiluonteisuus aiheuttavat vaihteluita yrityksen käyttöpääomatarpeeseen, ja näihin vaihteluihin yrityksen tulisi kyetä vastaamaan. Työn tuloksia ovat käyttöpääoman ennuste- ja optimimittaristot sekä 16 yritykselle räätälöityä käyttöpääoman hallinnan keinoa. Keinoja ovat muun muassa tilauspisteiden jatkuva päivittäminen ja tiiviimpi toimittajayhteistyö. Mittaaminen, optimitason määrittäminen ja hallintakeinojen määritys ja toteutus muodostavat käyttöpääoman hallinnan syklin, jonka tulisi toistua käyttöpääoman hallinnassa. Käyttöpääomasta vapautunut pääoma tulee sijoittaa yrityksen tuottaviin investointeihin. Investointien myötä yrityksen kannattavuus ja maksuvalmius paranevat. Tulevaisuudessa, parantuneen maksuvalmiuden myötä on käyttöpääoman hallinnan strategia määritettävä uudelleen.

Suomalaisten teknologia-alan pörssiyhtiöiden suoriutuminen finanssikriisin aikana

Tässä kandidaatintutkielmassa tarkastellaan vuonna 2008 kärjistyneen finanssikriisin aiheuttamien suhdannevaihteluiden vaikutusta Nasdaq OMX Helsinkiin listattujen teknologia-alan yritysten suorituskykyyn. Tutkielman päätavoitteena on selvittää millaisiin listautuneisiin teknologia-alan yrityksiin finanssikriisi vaikutti eniten. Analyysi toteutettiin kvantitatiivisin menetelmin hyödyntämällä klusterianalyysiä sekä Kruskal-Wallis -testiä.

Public-private partnership investments in dry ports – Russian logistics markets and risks

The investments have always been considered as an essential backbone and so-called ‘locomotive’ for the competitive economies. However, in various countries, the state has been put under tight budget constraints for the investments in capital intensive projects. In response to this situation, the cooperation between public and private sector has grown based on public-private mechanism. The promotion of favorable arrangement for collaboration between public and private sectors for the provision of policies, services, and infrastructure in Russia can help to address the problems of dry ports development that neither municipalities nor the private sector can solve alone. Especially, the stimulation of public-private collaboration is significant under the exposure to externalities that affect the magnitude of the risks during all phases of project realization. In these circumstances, the risk in the projects also is becoming increasingly a part of joint research and risk management practice, which is viewed as a key approach, aiming to take active actions on existing global and specific factors of uncertainties. Meanwhile, a relatively little progress has been made on the inclusion of the resilience aspects into the planning process of a dry ports construction that would instruct the capacity planner, on how to mitigate the occurrence of disruptions that may lead to million dollars of losses due to the deviation of the future cash flows from the expected financial flows on the project. The current experience shows that the existing methodological base is developed fragmentary within separate steps of supply chain risk management (SCRM) processes: risk identification, risk evaluation, risk mitigation, risk monitoring and control phases. The lack of the systematic approach hinders the solution of the problem of risk management processes of dry port implementation. Therefore, management of various risks during the investments phases of dry port projects still presents a considerable challenge from the practical and theoretical points of view. In this regard, the given research became a logical continuation of fundamental research, existing in the financial models and theories (e.g., capital asset pricing model and real option theory), as well as provided a complementation for the portfolio theory. The goal of the current study is in the design of methods and models for the facilitation of dry port implementation through the mechanism of public-private partnership on the national market that implies the necessity to mitigate, first and foremost, the shortage of the investments and consequences of risks. The problem of the research was formulated on the ground of the identified contradictions. They rose as a continuation of the trade-off between the opportunities that the investors can gain from the development of terminal business in Russia (i.e. dry port implementation) and risks. As a rule, the higher the investment risk, the greater should be their expected return. However, investors have a different tolerance for the risks. That is why it would be advisable to find an optimum investment. In the given study, the optimum relates to the search for the efficient portfolio, which can provide satisfaction to the investor, depending on its degree of risk aversion. There are many theories and methods in finance, concerning investment choices. Nevertheless, the appropriateness and effectiveness of particular methods should be considered with the allowance of the specifics of the investment projects. For example, the investments in dry ports imply not only the lump sum of financial inflows, but also the long-term payback periods. As a result, capital intensity and longevity of their construction determine the necessity from investors to ensure the return on investment (profitability), along with the rapid return on investment (liquidity), without precluding the fact that the stochastic nature of the project environment is hardly described by the formula-based approach. The current theoretical base for the economic appraisals of the dry port projects more often perceives net present value (NPV) as a technique superior to other decision-making criteria. For example, the portfolio theory, which considers different risk preference of an investor and structures of utility, defines net present value as a better criterion of project appraisal than discounted payback period (DPP). Meanwhile, in business practice, the DPP is more popular. Knowing that the NPV is based on the assumptions of certainty of project life, it cannot be an accurate appraisal approach alone to determine whether or not the project should be accepted for the approval in the environment that is not without of uncertainties. In order to reflect the period or the project’s useful life that is exposed to risks due to changes in political, operational, and financial factors, the second capital budgeting criterion – discounted payback period is profoundly important, particularly for the Russian environment. Those statements represent contradictions that exist in the theory and practice of the applied science. Therefore, it would be desirable to relax the assumptions of portfolio theory and regard DPP as not fewer relevant appraisal approach for the assessment of the investment and risk measure. At the same time, the rationality of the use of both project performance criteria depends on the methods and models, with the help of which these appraisal approaches are calculated in feasibility studies. The deterministic methods cannot ensure the required precision of the results, while the stochastic models guarantee the sufficient level of the accuracy and reliability of the obtained results, providing that the risks are properly identified, evaluated, and mitigated. Otherwise, the project performance indicators may not be confirmed during the phase of project realization. For instance, the economic and political instability can result in the undoing of hard-earned gains, leading to the need for the attraction of the additional finances for the project. The sources of the alternative investments, as well as supportive mitigation strategies, can be studied during the initial phases of project development. During this period, the effectiveness of the investments undertakings can also be improved by the inclusion of the various investors, e.g. Russian Railways’ enterprises and other private companies in the dry port projects. However, the evaluation of the effectiveness of the participation of different investors in the project lack the methods and models that would permit doing the particular feasibility study, foreseeing the quantitative characteristics of risks and their mitigation strategies, which can meet the tolerance of the investors to the risks. For this reason, the research proposes a combination of Monte Carlo method, discounted cash flow technique, the theory of real options, and portfolio theory via a system dynamics simulation approach. The use of this methodology allows for comprehensive risk management process of dry port development to cover all aspects of risk identification, risk evaluation, risk mitigation, risk monitoring, and control phases. A designed system dynamics model can be recommended for the decision-makers on the dry port projects that are financed via a public-private partnership. It permits investors to make a decision appraisal based on random variables of net present value and discounted payback period, depending on different risks factors, e.g. revenue risks, land acquisition risks, traffic volume risks, construction hazards, and political risks. In this case, the statistical mean is used for the explication of the expected value of the DPP and NPV; the standard deviation is proposed as a characteristic of risks, while the elasticity coefficient is applied for rating of risks. Additionally, the risk of failure of project investments and guaranteed recoupment of capital investment can be considered with the help of the model. On the whole, the application of these modern methods of simulation creates preconditions for the controlling of the process of dry port development, i.e. making managerial changes and identifying the most stable parameters that contribute to the optimal alternative scenarios of the project realization in the uncertain environment. System dynamics model allows analyzing the interactions in the most complex mechanism of risk management process of the dry ports development and making proposals for the improvement of the effectiveness of the investments via an estimation of different risk management strategies. For the comparison and ranking of these alternatives in their order of preference to the investor, the proposed indicators of the efficiency of the investments, concerning the NPV, DPP, and coefficient of variation, can be used. Thus, rational investors, who averse to taking increased risks unless they are compensated by the commensurate increase in the expected utility of a risky prospect of dry port development, can be guided by the deduced marginal utility of investments. It is computed on the ground of the results from the system dynamics model. In conclusion, the outlined theoretical and practical implications for the management of risks, which are the key characteristics of public-private partnerships, can help analysts and planning managers in budget decision-making, substantially alleviating the effect from various risks and avoiding unnecessary cost overruns in dry port projects.