The determinants of fair value measurements of banks: International evidence

The purpose of this study is to investigate the accounting choice decisions of banks to employ Level 3 inputs in estimating the value of their financial assets and liabilities. Using a sample of 146 bank-year observations from 18 countries over 2009-2012, this study finds banks’ incentives to use Level 3 valuation inputs are associated with both firm-level and country-level determinants. At the firm-level, leverage, profitability (in term of net income), Tier 1 capital ratio, size and audit committee independence are associated with the percentage of Level 3 valuation inputs. At the country-level, economy development, legal region, legal enforcement and investor rights are also associated with the Level 3 classification choice. Lastly, ‘secrecy’, the proxy for culture dimensions and values, is found to be positively associated with the use of Level 3 valuation inputs. Altogether, these findings suggest that banks use the discretion available under Level 3 inputs opportunistically to avoid violating debt covenants limits, to increase earnings and manage their capital ratios. Results of this study also highlight that corporate governance quality at the firm-level (e.g. audit committee independence) and institutional features can constrain banks’ opportunistic behaviors in using the discretion available under Level 3 inputs. The results of this study have important implications for standard setters and contribute to the debate on the use of fair value accounting in an international context.

Determinants of institutional care at older ages in Finland

Väitöskirjassa selvitettiin ikäihmisten laitoshoitoon siirtymisen todennäköisyyttä ja sen taustoja kansainvälisesti ainutlaatuisen rekisteriaineiston avulla. Selvitettäviä asioita olivat eri sairauksien, sosioekonomisten tekijöiden, puolison olemassaolon ja leskeksi jäämisen yhteys laitoshoitoon siirtymiseen yli 65-vuotiailla suomalaisilla. Tutkimuksessa havaittiin, että dementia, Parkinsonin tauti, aivohalvaus, masennusoireet ja muut mielenterveysongelmat, lonkkamurtuma sekä diabetes lisäsivät ikäihmisten todennäköisyyttä siirtyä laitoshoitoon yli 50 prosentilla, kun muut sairaudet ja sosiodemografiset tekijät oli otettu huomioon. Korkeat tulot vähensivät laitoshoidon todennäköisyyttä, kun taas puutteellinen asuminen (ilman peseytymistiloja tai keskus- tai sähkölämmitystä) sekä erittäin puutteellinen asuminen (ilman lämmintä vettä, vesijohtoa, viemäriä tai vesivessaa) lisäsivät todennäkösyyttä, kun muut sosiodemografiset tekijät, sairaudet ja asuinalue oli huomioitu. Kerrostalon hissittömyys ei ollut yhteydessä laitoshoidon todennäköisyyteen. Todennäköisyys siirtyä laitoshoitoon oli jostain syystä korkeampaa niillä ikäihmisillä, jotka asuivat vuokralla ja matalampaa omakotitalossa asuvilla ja niillä, joilla oli auto. Puolison olemassaolo vähensi ja leskeksi jääminen lisäsi laitoshoidon todennäköisyyttä huomattavasti. Todennäköisyys oli erityisen suuri, yli kolminkertainen, kun puolison kuolemasta oli kulunut enintään kuukausi verrattuna niihin, joiden puoliso oli elossa. Todennäköisyys laski, kun puolison kuolemasta kului aikaa. Miesten ja naisten tulokset olivat samansuuntaisia. Korkeat tulot tai koulutus eivät suojanneet riskiltä joutua laitoshoitoon puolison kuoltua. Puolison kuolema näyttää lisäävän hoidon tarvetta, kun kotona ei ole enää puolisoa tukemassa ja huolehtimassa kodin askareista. Laitoshoidon tarve vähenee, jos ja kun lesket ajan kuluessa oppivat elämään yksin. Toisaalta tutkimustulokset saattavat viitata myös siihen, että kaikkein huonokuntoisimmat lesket, jotka eivät pärjää yksin asuessaan, siirtyvät laitoshoitoon hyvin nopeasti puolison kuoltua. Tutkimuksessa oli mukana yhteensä yli 280 000 yli 65-vuotiasta henkilöä, joiden pitkäaikaiseen laitoshoitoon siirtymistä seurattiin tammikuusta 1998 syyskuuhun 2003. Laitoshoidoksi määriteltiin terveyskeskuksissa, sairaaloissa ja vanhainkodeissa tai vastaavissa yksiköissä tapahtuva pitkäaikainen hoito, joka kesti yli 90 vuorokautta tai oli vahvistettu pitkäaikaishoidon päätöksellä. Tutkimuksessa käytetty aineisto koottiin väestörekistereistä, sosiaali- ja terveydenhuollon rekistereistä ja lääkerekistereistä.

Pathways to health : Determinants of health, health behaviour and health inequalities in early adulthood

There is increasing evidence that the origins of poor adult health and health inequalities can be traced back to circumstances preceding current socioeconomic position and living conditions. The life-course approach to examining the determinants of health has emphasised that exposure to adverse social and economic circumstances in earlier life or concurrent adverse circumstances due to unfavourable living conditions in earlier life may lead to poor health, health-damaging behaviour, disease or even premature death in adulthood. There is, however, still a lack of knowledge about the contribution of social and economic circumstances in childhood and youth to adult health and health inequalities, and even less is known about how environmental and behavioural factors in adulthood mediate the effects of earlier adverse experiences. The main purpose of this study was to deepen our understanding of the development of poor health, health-damaging behaviours and health inequalities during the life-course. Its aim was to find out which factors in earlier and current circumstances determine health, the most detrimental indicators of health behaviour (smoking, heavy drinking and obesity as a proxy for the balance between nutrition and exercise), and educational health differences in young adults in Finland. Following the ideas of the social pathway theory, it was assumed that childhood environment affects adult health and its proximal determinants via different pathways, including educational, work and family careers. Early adulthood was studied as a significant phase of life when many behavioural patterns and living conditions relevant to health are established. In addition, socioeconomic health inequalities seem to emerge rapidly when moving into adulthood; they are very small or non-existent in childhood and adolescence, but very marked by early middle age. The data of this study were collected in 2000 2001 as part of the Health 2000 Survey (N = 9,922), a cross-sectional and nationally representative health interview and examination survey. The main subset of data used in this thesis was the one comprising the age group 18 29 years (N = 1,894), which included information collected by standardised structured computer-aided interviews and self-administered questionnaires. The survey had a very high participation rate at almost 90% for the core questions. According to the results of this study, childhood circumstances predict the health of young adults. Almost all the childhood adversities studied were found to be associated with poor self-rated health and psychological distress in early adulthood, although fewer associations were found with the somatic morbidity typical of young adults. These effects seemed to be more or less independent of the young adult s own education. Childhood circumstances also had a strong effect on smoking and heavy drinking, although current circumstances and education in particular, played a role in mediating this effect. Parental smoking and alcohol abuse had an influence on the corresponding behaviours of offspring. Childhood circumstances had a role in the development of obesity and, to a lesser extent, overweight, particularly in women. The findings support the notion that parental education has a strong effect on early adult obesity, even independently of the young adult s own educational level. There were marked educational differences in self-rated health in early adulthood: those in the lowest educational category were most likely to have average or poorer health. Childhood social circumstances seemed to explain a substantial part of these educational differences. In addition, daily smoking and heavy drinking contributed substantially to educational health differences. However, the contribution of childhood circumstances was largely shared with health behaviours adopted by early adulthood. Employment also shared the effects of childhood circumstances on educational health differences. The results indicate that childhood circumstances are important in determining health, health behaviour and health inequalities in early adulthood. Early recognition of childhood adversities followed by relevant support measures may play an important role in preventing the unfortunate pathways leading to the development of poor health, health-damaging behaviour and health inequalities. It is crucially important to recognise the needs of children living in adverse circumstances as well as children of substance abusing parents. In addition, single-parent families would benefit from support. Differences in health and health behaviours between different sub-groups of the population mean that we can expect to see ever greater health differences when today s generation of young adults grows older. This presents a formidable challenge to national health and social policy as well as health promotion. Young adults with no more than primary level education are at greatest risk of poor health. Preventive policies should emphasise the role of low educational level as a key determinant of health-damaging behaviours and poor health. Keywords: health, health behaviour, health inequalities, life-course, socioeconomic position, education, childhood circumstances, self-rated health, psychological distress, somatic morbidity, smoking, heavy drinking, BMI, early adulthood

Essays on the Determinants of International Portfolio Investments

Investors significantly overweight domestic assets in their portfolios. This behavior which is commonly called “home bias” contradicts the prescriptions of portfolio theory. This thesis explores potential reasons for the “home bias” by examining the characteristics of the investing and the target countries and features of the interaction between them. A common theme of the four essays is a focus on the importance of information about foreign markets in explaining the share of these markets in investors’ portfolios. The results indicate that the size of the equity ownership in another country strongly relates to the distance to the financial capital of that country, and to trade in goods with and direct investments (FDI) to that country. The first essay empirically investigates the relationship between trade in real goods and portfolio investments. Overall, the evidence indicates a substantial role for trade in reducing the information cost relating to portfolio investments. The second essay examines the implications of the launch of the European Monetary Union (EMU) on international portfolio investments. The evidence on the allocation of Finnish international portfolio investments is more consistent with an information-based than a diversification motive explanation. The third essay employs new data for a large number of countries and further explores the role of trade on international portfolio investments. The results indicate that trade provides important information especially on firms in countries in which the corporate governance structure and the information environment of firms generate less reliable information. The fourth essay examines the relationship between direct investments (FDI) and portfolio investments. In contrast to the predications of portfolio theory, it provides evidence that FDI is a complement rather than a substitute for portfolio investments.

With Good Reputation Size Does not Matter: Issue Frequency and the Determinants of Debt Maturity

This paper examines empirically the effect firm reputation has on the determinants of debt maturity. Utilising data from European primary bond market between 1999 and 2005, I find that the maturity choice of issuers with a higher reputation is less sensitive to macroeconomic conditions, market credit risk-premiums, prevailing firm credit quality and size of the debt issue. The annualised coupon payments are shown to be a significant factor in determining the debt maturity and reveal a monotonously increasing relationship between credit quality and debt maturity once controlled for. Finally, I show that issuers lacking a credit rating have an implied credit quality positioned between investment-grade and speculative-grade debt.

The determinants of sexually transmitted infections among reproductive age women in St. Petersburg, Estonia and Finland

OBJECTIVES: Sexually transmitted infections' (STIs) rate vary in St. Petersburg, Estonia and Finland; the aim was to compare the determinants of self-reported sexually transmitted infections in these areas. METHODS: Data from four population-based questionnaire surveys were used (Finland in 1992 and 1999; St. Petersburg in 2003; Estonia in 2004). With the exception of the 1992 Finnish survey (interview) all were postal surveys, with 1,070 respondents in Finland (78 and 52% response rates), 1,147 (68%) in St. Petersburg, and 5,190 (54%) in Estonia. RESULTS: Risky sexual behaviours were equally common in the three areas and the determinants were the same. Women with an STIs history more often had had their first sexual intercourse when aged under 18, had not used condom during first intercourse, had a high number of lifetime or previous year sexual partners. However, marital status and education were not similar determinants. Cohabiting and well-educated women in Finland were more likely to have STIs while in other areas the associations found were not statistically significant. CONCLUSIONS: Risky behaviour predicts STIs, but does not explain the varying rates of STIs between areas.

Analysis of performance of a hot gas injection thrust vector control system

The complex three-dimensional flowfield produced by secondary injection of hot gases in a rocket nozzle for thrust vector control is analyzed by solving unsteady three-dimensional Euler equations with appropriate boundary conditions. Various system performance parameters like secondary jet amplification factor and axial thrust augmentation are deduced by integrating the nozzle wall pressure distributions obtained as part of the flowfield solution and compared with measurements taken in actual static tests. The agreement is good within the practical range of secondary injectant flow rates for thrust vector control applications.

Antigenic determinants of human serum retinol binding protein as probed with monoclonal antibodies

Monoclonal antibodies raised against human serum retinol-binding protein (hRBP) were used as probes for the study of the antigenic determinants of hRBP and those shared with the same protein from other species. The antibodies could be classified into four distinct groups and react with the homologous proteins from the rat as well as the rabbit sera. Three of these antibodies recognize sequential or continuous epitopes while the remaining antibody is directed against a discontinuous or conformational epitope. By chemical cleavage with cyanogen bromide, the domains recognized by the monoclonal antibodies could be delineated. By solid-phase synthetic approach, the core sequences recognized by two of these monoclonal antibodies were identified to amino acid sequences 45–51 and 128–131 of the primary amino acid sequence of hRBP.