Russian Enterprise Restructuring - the Effect of Privatisation and Market Liberalisation on the Performance of Large Enterprises

The fundamental question in the transitional economies of the former Eastern Europe and Soviet Union has been whether privatisation and market liberalisation have had an effect on the performance of former state-owned enterprises. This study examines the effect of privatisation, capital market discipline, price liberalisation and international price exposure on the restructuring of large Russian enterprises. The performance indicators are sales, profitability, labour productivity and stock market valuations. The results do not show performance differences between state-owned and privatised enterprises. On the other hand, the expansion of the de novo private sector has been strong. New enterprises have significantly higher sales growth, profitability and labour productivity. However, the results indicate a diminishing effect of ownership. The international stock market listing has a significant positive effect on profitability, while the effect of domestic stock market listing is insignificant. The international price exposure has a significant positive increasing effect on profitability and labour productivity. International enterprises have higher profitability only when operating on price liberalised markets, however. The main results of the study are strong evidence on the positive effects of international linkages on the enterprise restructuring and the higher than expected role of new enterprises in the Russian economy.

Power to Gas - sähköenergiasta luonnonkaasua, liiketoimintamahdollisuudet Suomessa

Uusiutuvan sähköntuotannon osuuden kasvaessa kasvaa tarve tasata sähköntuotannon ja kulutuksen vaihteluita varastoimalla sähköä. Power to Gas (PtG) - sähköenergiasta luonnonkaasua tarjoaa yhden mahdollisuuden varastoida sähköä. Sähköä käytetään veden elektrolyysiin, jossa syntynyt vety käytetään metanoinissa yhdessä hiilidioksidin kanssa muodostamaan korvaavaa luonnonkaasua. Näin syntynyttä korvaava luonnonkaasua sähköstä kutsutaan e-SNG-kaasuksi. Tässä työssä tutkitaan PtG-laitoksen investointi, käyttö- ja kunnossapitokuluja. Työssä luodaan laskentamalli, jolla lasketaan PtG-laitoksen neljälle käyttötapaukselle kannattavuuslaskelma. Käyttötapauksille lasketaan myös herkkyystarkasteluja. Kannattavuuslaskelmien perusteella päätellään PtG-laitoksen liiketoimintamahdollisuudet Suomessa. Työssä laskettujen kannattavuuslaskelmien perusteella PtG-laitoksen perustapausten liiketoimintamahdollisuudet ovat huonot. Laskettujen herkkyystarkastelujen perusteella havaittiin, että investointikulut, laitoksen ajoaika ja lisätulot hapesta ja lämmöstä ovat kannattavuuden kannalta kriittisimmät menestystekijät.

THE COSTS OF RAISING EQUITY RATIO FOR BANKS Evidence from publicly listed banks operating in Finland

The solvency rate of banks differs from the other corporations. The equity rate of a bank is lower than it is in corporations of other field of business. However, functional banking industry has huge impact on the whole society. The equity rate of a bank needs to be higher because that makes the banking industry more stable as the probability of the banks going under will decrease. If a bank goes belly up, the government will be compensating the deposits since it has granted the bank’s depositors a deposit insurance. This means that the payment comes from the tax payers in the last resort. Economic conversation has long concentrated on the costs of raising equity ratio. It has been a common belief that raising equity ratio also increases the banks’ funding costs in the same phase and these costs will be redistributed to the banks customers as higher service charges. Regardless of the common belief, the actual reaction of the funding costs to the higher equity ratio has been studied only a little in Europe and no study has been constructed in Finland. Before it can be calculated whether the higher stability of the banking industry that is caused by the raise in equity levels compensates the extra costs in funding costs, it must be calculated how much the actual increase in the funding costs is. Currently the banking industry is controlled by complex and heavy regulation. To maintain such a complex system inflicts major costs in itself. This research leans on the Modigliani and Miller theory, which shows that the finance structure of a firm is irrelevant to their funding costs. In addition, this research follows the calculations of Miller, Yang ja Marcheggianon (2012) and Vale (2011) where they calculate the funding costs after the doubling of specific banks’ equity ratios. The Finnish banks studied in this research are Nordea and Danske Bank because they are the two largest banks operating in Finland and they both also have the right company form to able the calculations. To calculate the costs of halving their leverages this study used the Capital Asset Pricing Model. The halving of the leverage of Danske Bank raised its funding costs for 16—257 basis points depending on the method of assessment. For Nordea the increase in funding costs was 11—186 basis points when its leverage was halved. On the behalf of the results found in this study it can be said that the doubling of an equity ratio does not increase the funding costs of a bank one by one. Actually the increase is quite modest. More solvent banks would increase the stability of the banking industry enormously while the increase in funding costs is low. If the costs of bank regulation exceeds the increase in funding costs after the higher equity ratio, it can be thought that this is the better way of stabilizing the banking industry rather than heavy regulation.

Cascade hydropower capacity increase profitability analysis with optimisation modelling

The electricity market and climate are both undergoing a change. The changes impact hydropower and provoke an interest for hydropower capacity increases. In this thesis a new methodology was developed utilising short-term hydropower optimisation and planning software for better capacity increase profitability analysis accuracy. In the methodology income increases are calculated in month long periods while varying average discharge and electricity price volatility. The monthly incomes are used for constructing year scenarios, and from different types of year scenarios a long-term profitability analysis can be made. Average price development is included utilising a multiplier. The method was applied on Oulujoki hydropower plants. It was found that the capacity additions that were analysed for Oulujoki were not profitable. However, the methodology was found versatile and useful. The result showed that short periods of peaking prices play major role in the profitability of capacity increases. Adding more discharge capacity to hydropower plants that initially bypassed water more often showed the best improvements both in income and power generation profile flexibility.

THE COSTS OF RAISING EQUITY RATIO FOR BANKS Evidence from publicly listed banks operating in Finland

The solvency rate of banks differs from the other corporations. The equity rate of a bank is lower than it is in corporations of other field of business. However, functional banking industry has huge impact on the whole society. The equity rate of a bank needs to be higher because that makes the banking industry more stable as the probability of the banks going under will decrease. If a bank goes belly up, the government will be compensating the deposits since it has granted the bank’s depositors a deposit insurance. This means that the payment comes from the tax payers in the last resort. Economic conversation has long concentrated on the costs of raising equity ratio. It has been a common belief that raising equity ratio also increases the banks’ funding costs in the same phase and these costs will be redistributed to the banks customers as higher service charges. Regardless of the common belief, the actual reaction of the funding costs to the higher equity ratio has been studied only a little in Europe and no study has been constructed in Finland. Before it can be calculated whether the higher stability of the banking industry that is caused by the raise in equity levels compensates the extra costs in funding costs, it must be calculated how much the actual increase in the funding costs is. Currently the banking industry is controlled by complex and heavy regulation. To maintain such a complex system inflicts major costs in itself. This research leans on the Modigliani and Miller theory, which shows that the finance structure of a firm is irrelevant to their funding costs. In addition, this research follows the calculations of Miller, Yang ja Marcheggianon (2012) and Vale (2011) where they calculate the funding costs after the doubling of specific banks’ equity ratios. The Finnish banks studied in this research are Nordea and Danske Bank because they are the two largest banks operating in Finland and they both also have the right company form to able the calculations. To calculate the costs of halving their leverages this study used the Capital Asset Pricing Model. The halving of the leverage of Danske Bank raised its funding costs for 16—257 basis points depending on the method of assessment. For Nordea the increase in funding costs was 11—186 basis points when its leverage was halved. On the behalf of the results found in this study it can be said that the doubling of an equity ratio does not increase the funding costs of a bank one by one. Actually the increase is quite modest. More solvent banks would increase the stability of the banking industry enormously while the increase in funding costs is low. If the costs of bank regulation exceeds the increase in funding costs after the higher equity ratio, it can be thought that this is the better way of stabilizing the banking industry rather than heavy regulation.

Weathering crises on social media – Theory and practices from social media active organizations operating in Finland

Thesis compiles findings from previous research to produce guidelines on addressing crises on social media. These guidelines extracted from previous research are compared qualitatively with empirical evidence from 12 organizations by examining whether organizations apply practices recommended in previous research. Much of guidelines gain support from practitioners with few exceptions. Findings stemming from theory and practice combine to shed light on how controversies are born on social media, how crises can be prevented on social media and how organizations may manage crisis situations on social media. The majority of the resulting guidelines focus on how to address negative information and communicate during a crisis but other means of crisis management are also presented. Previous research had voiced that the field of public relations was very fractured, crisis management was lacking qualitative research and provided very little information on what organizations should do before a crisis. Thesis collects a comprehensive amount of previous research from various fields of PR in an effort to unite findings and guidelines, gathers and analyzes empirical data in a qualitative manner and includes a pre-crisis paradigm. One of the challenges in the field of crisis management still remains the absence of universally agreed definition of a crisis and the lack of means to quantify and compare the magnitude of crises.