Trade Liberalization, Heterogeneous Firms and Industrial Dynamics

This master thesis studies how trade liberalization affects the firm-level productivity and industrial evolution. To do so, I built a dynamic model that considers firm-level productivity as endogenous to investigate the influence of trade on firm’s productivity and the market structure. In the framework, heterogeneous firms in the same industry operate differently in equilibrium. Specifically, firms are ex ante identical but heterogeneity arises as an equilibrium outcome. Under the setting of monopolistic competition, this type of model yields an industry that is represented not by a steady-state outcome, but by an evolution that rely on the decisions made by individual firms. I prove that trade liberalization has a general positive impact on technological adoption rates and hence increases the firm-level productivity. Besides, this endogenous technology adoption model also captures the stylized facts: exporting firms are larger and more productive than their non-exporting counterparts in the same sector. I assume that the number of firms is endogenous, since, according to the empirical literature, the industrial evolution shows considerably different patterns across countries; some industries experience large scale of firms’ exit in the period of contracting market shares, while some industries display relative stable number of firms or gradually increase quantities. The special word “shakeout” is used to describe the dramatic decrease in the number of firms. In order to explain the causes of shakeout, I construct a model where forward-looking firms decide to enter and exit the market on the basis of their state of technology. In equilibrium, firms choose different dates to adopt innovation which generate a gradual diffusion process. It is exactly this gradual diffusion process that generates the rapid, large-scale exit phenomenon. Specifically, it demonstrates that there is a positive feedback between firm’s exit and adoption, the reduction in the number of firms increases the incentives for remaining firms to adopt innovation. Therefore, in the setting of complete information, this model not only generates a shakeout but also captures the stability of an industry. However, the solely national view of industrial evolution neglects the importance of international trade in determining the shape of market structure. In particular, I show that the higher trade barriers lead to more fragile markets, encouraging the over-entry in the initial stage of industry life cycle and raising the probability of a shakeout. Therefore, more liberalized trade generates more stable market structure from both national and international viewpoints. The main references are Ederington and McCalman(2008,2009).

International Portfolio Investments and The Informational Value of Trade

A large volume of literature suggests that information asymmetry resulting from the spatial separation between investors and investments have a significant impact on the composition of investors’ domestic and international portfolios. I show that institutional factors affecting trading in tangible goods help explain a substantial portion of investors’ spatial bias. More importantly, I demonstrate that an information flow medium with breadth and richness directly linked to the bilateral commitment of resources between countries, that I measure by their trading intensity in tangible goods, is consistent with the prevailing country allocation in investors’ international portfolios.

Puunoston kehittäminen Stora Enso Metsän Helsingin palvelupisteessä

The operation environment in the roundwood trade in Finland in the 1990’s include several changes. They are changes in the structure of non-industrial private forest (NIPF) ownership, forest taxation, in forest legislation, in price recommendation agreement, diminishing resources of forestry extension services, etc. At the same time, the roundwood demand has been rising. All these developments cause uncertainty in wood procurement organisations, and call for research to find out how to adapt into the changing environment. The objective of this study is to produce information for roundwood purchasing planning and cus-tomer satisfaction management to be used by Stora Enso Metsä Customer Service, Helsinki. For this pur-pose, data needs to be gathered about the urban NIPFs and their forest estates, behaviour related to forestry and timber-selling, customer satisfaction in their latest timber selling transaction, and their opinions about Enso’s new customer service office and its service concept. To fulfil the objective of the study, a NIPF -owner -survey (N=1064, response rate 39,7%) was con-ducted in October 1998-January 1999. The sample was made on the basis of the marketing database of Stora Enso Oyj Forest Customer Service in Helsinki. In planning the frame of reference of the empirical study, the model of service quality by Grönroos was applied. The following aspects were included in the 7-page questionnaire: demographic, sosio-economic and forest estate background, relation to the forest service supply, behaviour related to forestry, timber-selling motives and behaviour, last contact organisation and its image in forestry business, expectations and percep-tions in the latest timber-selling transactions, and behavioural intentions. The results revealed that the share of women, pensioners and academically educated people among forest owners was quite high. The majority of the forest estates of the metropolitan forest owners were situ-ated in the provinces of South Finland and East Finland. The average forest estate area was considerably smaller than in a previous study. Economic and recreational objectives were most important in the use of forests. Forest Associations were involved in half of the roundwood sales transactions of the respondents in the metropolitan area. The wood quantity of transactions was considerably higher than the average in the whole country. Bank-organised forest-related activities, taxation infos and trips to the forest were the most popular activities. Among the services, silvicultural advices were needed mostly and stub treatment least. Brochure material related to stumpage timber sales and taxation were considered most important compared to material related to delivery sales. The service expectations were at highest for women and they were less satisfied with the service than men. 2nd and 3rd generation residents of the metropolitan area thought about the new customer service concept more positively than the 1st generation residents. Internet users under 60 years thought more positively about new satellite picture-based woodlot search concept. Cross-tabulation of factor scores against background variables indicated that women with relatively low education level a greater need to sell roundwood than entrepreneurs, white-collar workers and directors, and Internet users. Suspiciousness towards timber procurement organisations was relatively strong among women and those whose forest income share of the total income was either null or over 20 %. The average customer satisfaction score was negative in all nine questions. Statistical differences be-tween different companies did not exist in the average satisfaction scores. Stora Enso’s Helsinki forest cus-tomer service could choose the ability to purchase all timber grades as its competitive advantage. Out of nine service dimension included in the questionnaire, in this particular service dimension, Enso’s Helsinki forest customer service’s score exceeded most all organisations’ average customer satisfaction score. On the basis of importance – performance matrix, advice and quidance could have been provided more to the forest owners in their latest timber–selling transaction.

The Relay Selection and Transmission Trade-off in Cooperative Communication Systems

A common and practical paradigm in cooperative communication systems is the use of a dynamically selected `best' relay to decode and forward information from a source to a destination. Such systems use two phases - a relay selection phase, in which the system uses transmission time and energy to select the best relay, and a data transmission phase, in which it uses the spatial diversity benefits of selection to transmit data. In this paper, we derive closed-form expressions for the overall throughput and energy consumption, and study the time and energy trade-off between the selection and data transmission phases. To this end, we analyze a baseline non-adaptive system and several adaptive systems that adapt the selection phase, relay transmission power, or transmission time. Our results show that while selection yields significant benefits, the selection phase's time and energy overhead can be significant. In fact, at the optimal point, the selection can be far from perfect, and depends on the number of relays and the mode of adaptation. The results also provide guidelines about the optimal system operating point for different modes of adaptation. The analysis also sheds new insights on the fast splitting-based algorithm considered in this paper for relay selection.

Phytophthora in Finnish nurseries

Human-mediated movement of plants and plant products is now generally accepted to be the primary mode of introduction of plant pathogens. Species of the genus Phytophthora are commonly spread in this way and have caused severe epidemics in silviculture, horticulture as well as natural systems all over the world. The aims of the study were to gather information on the occurrence of Phytophthora spp. in Finnish nurseries, to produce information for risk assessments for these Phytophthora spp. by determining their host ranges and tolerance of cold temperatures, and to establish molecular means for their detection. Phytophthora cactorum was found to persist in natural waterbodies and results suggest that irrigation water might be a source of inoculum in nurseries. In addition to P. cactorum, isolates from ornamental nursery Rhododendron yielded three species new to Finland: P. ramorum, P. plurivora and P. pini. The only species with quarantine status, P. ramorum, was most adapted to growth in cold temperatures and able to persist in the nursery in spite of an annual sanitation protocol. Phytophthora plurivora and the closely related P. pini had more hosts among Nordic tree and plant species than P. ramorum and P. cactorum, and also had higher infectivity rates. All four species survived two weeks in -5 °C , and thus soil survival of these Phytophthoras in Finland is likely under current climatic conditions. The most common tree species in Finnish nurseries, Picea abies, was highly susceptible to P. plurivora and P. pini in pathogenicity trials. In a histological examination of P. plurivora in P. abies shoot tissues, fast necrotrophic growth was observed in nearly all tissues. The production of propagules in P. abies shoot tissue was only weakly indicated. In this study, a PCR DGGE technique was developed for simultaneous detection and identification of Phytophthora spp. It reliably detected Phytophthora in plant tissues and could discriminate most test species as well as indicate instances of multiple-species infections. It proved to be a useful detection and identification tool either applied alone or in concert with traditional isolation culture techniques. All of the introduced species of Phytophthora had properties that promote a high risk of establishment and spread in Finland. It is probable that more pathogens of this genus will be introduced and become established in Finland and other Nordic countries unless efficient phytosanitary control becomes standard practice in the international plant trade.

Can equipartition fields produce the tilts of bipolar magnetic regions?

The effect of turbulence on the nonaxisymmetric flux rings of equipartition field strength in bipolar magnetic regions is studied on the basis of the small-scale momentum exchange mechanism and the giant cell drag combined with the Kelvin-Helmholtz drag mechanism. It is shown that the giant cell drag and small-scale momentum exchange mechanism can make equipartition flux loops emerge at low latitudes, in addition to making them exhibit the observed tilts. However, the sizes of the flux tubes have to be restricted to a couple of hundred kilometers. An ad hoc constraint on the footpoints of the flux loops is introduced by not letting them move in the phi direction, and it is found that equipartition fields of any size can be made to emerge at sunspot latitudes with the observed tilts by suitably adjusting the footpoint separations.