The Impact of Acquisitions on Share Pricing and Long Term Performance – Empirical Evidence from the Global Automotive Industry

Automotive industry has faced intense consolidation pressure, which has lead to increasing number of M&As. However, empirical evidence has given controversial results suggesting that most of M&As are value destructive for acquiring companies and for acquiring companies’ shareholders. The objective of this master’s thesis is to examine how acquiring companies’ shareholders react to acquisition announcement and is the reaction in line with the long-term performance. This study uses empirical evidence from automotive industry, which has been characterized as an industry that holds large amount of vertical and horizontal synergies. Transaction data consists of 65 acquisitions made by publicly listed companies between 2008-2010. The short-term impact is tested by applying event study methodology while the long term operative performance is examined with accounting study methodology. The event study results indicate that during the three days after acquisition (t= 0-2), the acquiring firms’ stocks generate an abnormal return of 1.22% on average across all acquisitions. When long term performance is studied it is evident that acquiring companies perform better than the industry median pre- and post-transaction but there is no statistically significant evidence that the performance has increased. The only performance ratio indicating statistically significant decrease is Return on Equity (ROE). On long-term horizontal acquisitions seem to outperform conglomerate ones but otherwise deal characteristics do not have any statistically significant impact.

Empirical errors of small area estimates from the multisource National Forest Inventory in Eastern Finland

Abstract

From the Resource-Base to Firm Boundaries in the Electricity Network Business - Case Lappeenrannan Energia Oy

Tutkielman tavoitteena oli selvittääcase -yrityksen resurssi- ja kyvykkyyspohjaa resurssiperustaisen näkemyksen mukaan, sekä yrityksen rajoja transaktiokustannusteorian mukaan. Tutkimusongelmia lähestyttiin kirjallisuuskatsauksella, puoli-strukturoiduilla teemahaastatteluilla, sekä kyselylomakkeilla. Tutkielman päätuloksiksi voidaan Tukea löydetty resurssikuilu, resurssien ja kyvykkyyksien tutkinta, sekä kyselylomakkeiden rakentaminen ja käyttö. Tutkielman paljastamasta kuilusta voidaan erottaa kolme päähaastetta; ikääntyvät sähköverkot, ikääntyvä henkilökunta ja liiketoimintaosaamisen puute. Lisäksi resurssien ja kyvykkyyksien tutkinta nosti esille organisaation rutiineja ja prosesseja, ja kyselylomakkeet osoittautuivat varsin toimiviksi tutkimuksen kontekstissa. Yhteenvetona voidaan todeta, että sähköverkkoliiketoiminta ja case yritys ovat suuren rakennemuutoksen alla, joka tuo mukanaan suuria haasteita myös lähitulevaisuudessa.

Market Orientation in Rapidly Internationalizing Small Companies — Evidence from the Software Industry

For more than a decade, researchers have been aware of the increased pace of small-firm internationalization and the greater effect of these rapidly growing small businesses on the wealth, international trade, and job-creation opportunities of countries. Due to the small size of the home market, Finnish companies have been generally considered highly interested in internationalization. One particular domain in which rapid internationalization has been considered feasible is the global software business, with its knowledge-intensive nature and high growth potential. However, over time the failure rate of small entrepreneurial firms has remained especially high in high-technology markets. One of the reasons for this seems to lie in the fact that these companies are often formed by people with a strong technological background but limited competences in other areas. Further, research on the marketing capabilities of rapidly internationalizing high-tech firms has been scarce thus far. In addition, while there is much research on the first years of operations of rapidly internationalizing companies, it is not well known what becomes of them later on. Therefore, there is a need for more investigation into the managerial mindset, competences and decision-making in these small companies, especially from the perspective of how they acquire and exploit market knowledge, and enhance their networking capabilities in order to promote international expansion. The present study focuses on market orientation in small software firms that internationalize their operations rapidly in global software markets. It builds on qualitative data to illustrate how these companies develop their market-oriented product-market strategies during the process of increasing international commitment. It also shows how they manage their network relationships in order to be able to offer better customer service and to thrive in the fierce global competition. The study was conducted in the empirical context of Finnish small software companies, and the main data consists of interviews with top managers in these businesses. The interviews were designed to cover a minimum period of five years of the company's international operations, thus offering a retrospective in-depth perspective on market orientation, internationalization and partnerships in the given context. One particular focus is on less successfully internationalized software companies, and the challenges they face when approaching international markets. This study makes a significant contribution to the literature on market orientation for several reasons. First, building on data from the software industry, it clarifies the existing theory in the context of rapid internationalization and network relationships. Secondly, it provides a good body of evidence on market orientation in both successfully and less successfully internationalized companies, and identifies the key related differences between the two company groups. Thirdly, it highlights the importance of inter-firm networks in the rapid internationalization of small software firms, providing companies with important market knowledge and, in some cases, management challenges. Fourthly, this investigation clarifies market orientation in the context of different software-product strategies, thus, combining the perspectives of market orientation in both manufacturing and services. In sum, the results of the study are significant for both small software firms and public-policy makers since they shed light on the market-oriented managerial mindset and the market-information gathering and sharing processes that are needed in successful rapid internationalization.

Stress testing practices in risk management - Empirical evidence from the Finnish banking and insurance sectors

The main purpose of this study was to analyze how stress tests are used in risk management in the Finnish banking and insurance sectors. In order to enhance understanding of the topic, stress testing was explored in the context of corporate governance and regulato-ry implications of Basel II and Solvency II on stress testing were examined. In addition, the effects of the global financial crisis on stress testing were mapped and the differences in stress testing practices between the banking and insurance sector were discussed. The research method was qualitative case study and it was conducted by interviewing risk managers from ten institutions and a representative from FIN-FSA. Findings pointed out that stress testing practices vary significantly between different institutions. Interesting observations were made in terms of stress testing practices in the banking and insurance sectors. The increasing importance and use of stress tests were recognized as a result of the financial crisis. Stress testing was even considered more like art than science given the amount of challenges it involves. In general, improvements in stress tests were suggested, with an emphasis on stress concentration between different types of risks.

Towards a Strategic Sales Channel Partnership: A Case Study from the IT Services Industry

Strategic partnerships have become a key to competitive advantage and success in a dynamic, global business environment. Partnering provides a strategic response to complex offerings that need multiple sources of technology and knowledge, allowing companies to offer a wider range of services and solutions to meet their customers’ needs. Companies that collaborate with strategic partners in sales channels may significantly grow their business and improve their prospects of winning major contracts. As a consequence, companies are increasingly transforming their go-to-market strategies and sales channel structures to align with the need to create added value to customers together with a business partner. The research objective of this case study is to review and assess the success of an established sales channel partnership in IT services industry and to find ways how to develop it towards a strategic collaboration. The research consists of two main parts. The first part reviews the literature, concluding with the identification of the critical success factors for partnering. The second part sets out for the case findings, focusing on how the success of the established sales channel partnership is perceived by key executives within the partner organizations, and further what actions are required to make the sales channel partnership and joint go-to-market more strategic.

The us subprime crisis and stock market integration: evidence from the BRICS

The aim of this study is to examine the level of stock market co-movement in the BRICS countries and three major industrialized countries (Japan, UK and USA). While analyzing the interdependence and integration of markets, two subsets are examined: before (2000 – 2007) and during the global financial crisis (2007-2011). Generally, interdependence across markets is likely to increase during a highly volatile period. This is problematic because if it were true, the main benefit of international diversification would be reduced at times when it is most needed. The results reveal the dominant role of the US financial markets over the examined time period. Empirical studies of this research paper indicate that cross-market linkages have become slightly stronger during the ongoing subprime crisis than before crisis. However, results also show that an investor may obtain some international diversification benefits by investing especially in the BRICS countries despite the fact of unstable economic condition and growing globalization.

Model-based estimation of liquid flows in the blast furnace hearth and taphole

This thesis presents a set of methods and models for estimation of iron and slag flows in the blast furnace hearth and taphole. The main focus was put on predicting taphole flow patterns and estimating the effects of various taphole conditions on the drainage behavior of the blast furnace hearth. All models were based on a general understanding of the typical tap cycle of an industrial blast furnace. Some of the models were evaluated on short-term process data from the reference furnace. A computational fluid dynamics (CFD) model was built and applied to simulate the complicated hearth flows and thus to predict the regions of the hearth exerted to erosion under various operating conditions. Key boundary variables of the CFD model were provided by a simplified drainage model based on the first principles. By examining the evolutions of liquid outflow rates measured from the furnace studied, the drainage model was improved to include the effects of taphole diameter and length. The estimated slag delays showed good agreement with the observed ones. The liquid flows in the taphole were further studied using two different models and the results of both models indicated that it is more likely that separated flow of iron and slag occurs in the taphole when the liquid outflow rates are comparable during tapping. The drainage process was simulated with an integrated model based on an overall balance analysis: The high in-furnace overpressure can compensate for the resistances induced by the liquid flows in the hearth and through the taphole. Finally, a recently developed multiphase CFD model including interfacial forces between immiscible liquids was developed and both the actual iron-slag system and a water-oil system in laboratory scale were simulated. The model was demonstrated to be a useful tool for simulating hearth flows for gaining understanding of the complex phenomena in the drainage of the blast furnace.

The Rebirth of Dinamo Riga: From the Glorious Soviet Past to the Kontinental Hockey League

Since the end of Cold War rivalries, the world of international hockey was deemed to becoming increasingly homogenized along western sportization patterns. The introduction of the Russian-sponsored Kontinental Hockey League (KHL) signified a new era in the global diffusion of modern sports. Its recent expansion in the post-Soviet space and European countries significantly reshuffled the landscape of international hockey, offering new prospects for the studies of the intersection of sports, history, geopolitics and nationalism in the age of globalization. The aim of this study is to conceptualize the KHL and illuminate the role of ice hockey in post-Soviet Latvia. I treat the creation of the KHL and the integration of a Latvian-based team, “Dinamo Riga,” into the KHL within the broader discussion on the globalization of sports and its effects on national communities. The research is based on a case study of the modern rebirth of “Dinamo Riga” and its participation in the KHL and is confined to the scholarly themes in sports research, such as the history of modern sports and globalization, sports and nationalism. The study pays special attention to unveiling the geopolitical links between the restart of Latvian-Russian relations after the EU’s eastern enlargement and the re-emerging Latvian-Russian contacts in ice hockey. The research concludes that with the creation of the KHL, European hockey received a new charismatic “zone of prestige” for sports interaction. The project of “Dinamo Riga” became the new global phenomenon in Latvian sports in terms of its capabilities to transcend the post-Soviet geopolitical stereotypes in relation to Russia and serve as a new national symbol in the promotion and celebration of Latvian sporting nationalism. Further sociological research would require the clarification of the impact of Latvian-Russian cooperation in hockey on the bilateral relations of both countries and the formation of a national community in Latvia.

INSPIRE: contributions to Invenio from the leading High Energy Physics (HEP) platform

Presentation at Open Repositories 2014, Helsinki, Finland, June 9-13, 2014

Interfirm Information System for Supply Chain Management from the Cloud: An Exploratory Case Study from the Telecom Industry

This study examines the practice of supply chain management problems and the perceived demand information distortion’s (the bullwhip effect) reduction with the interfirm information system, which is delivered as a cloud service to a company operating in the telecommunications industry. The purpose is to shed light in practice that do the interfirm information system have impact on the performance of the supply chain and in particularly the reduction of bullwhip effect. In addition, a holistic case study of the global telecommunications company's supply chain is presented and also the challenges it’s facing, and this study also proposes some measures to improve the situation. The theoretical part consists of the supply chain and its management, as well as increasing the efficiency and introducing the theories and related previous research. In addition, study presents performance metrics for the bullwhip effect detection and tracking. The theoretical part ends in presenting cloud -based business intelligence theoretical framework used in the background of this study. The research strategy is a qualitative case study, supported by quantitative data, which is collected from a telecommunication sector company's databases. Qualitative data were gathered mainly with two open interviews and the e-mail exchange during the development project. In addition, other materials from the company were collected during the project and the company's web site information was also used as the source. The data was collected to a specific case study database in order to increase reliability. The results show that the bullwhip effect can be reduced with the interfirm information system and with the use of CPFR and S&OP models and in particularly combining them to an integrated business planning. According to this study the interfirm information system does not, however, solve all of the supply chain and their effectiveness -related problems, because also the company’s processes and human activities have a major impact.