Oligarchs, political regime changes, and firm valuation

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin-Putin regime shift in Russia, we find that the valuations of outside shareholders claims are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweigh the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results show that effects driven by the political regime change complement the traditional view stating that increased ownership concentration improved the performance of Russian oligarch firms.

Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

Monetary Policy, Stock Price Misalignments and Macroeconomic Instability

Perhaps the most fundamental prediction of financial theory is that the expected returns on financial assets are determined by the amount of risk contained in their payoffs. Assets with a riskier payoff pattern should provide higher expected returns than assets that are otherwise similar but provide payoffs that contain less risk. Financial theory also predicts that not all types of risks should be compensated with higher expected returns. It is well-known that the asset-specific risk can be diversified away, whereas the systematic component of risk that affects all assets remains even in large portfolios. Thus, the asset-specific risk that the investor can easily get rid of by diversification should not lead to higher expected returns, and only the shared movement of individual asset returns – the sensitivity of these assets to a set of systematic risk factors – should matter for asset pricing. It is within this framework that this thesis is situated. The first essay proposes a new systematic risk factor, hypothesized to be correlated with changes in investor risk aversion, which manages to explain a large fraction of the return variation in the cross-section of stock returns. The second and third essays investigate the pricing of asset-specific risk, uncorrelated with commonly used risk factors, in the cross-section of stock returns. The three essays mentioned above use stock market data from the U.S. The fourth essay presents a new total return stock market index for the Finnish stock market beginning from the opening of the Helsinki Stock Exchange in 1912 and ending in 1969 when other total return indices become available. Because a total return stock market index for the period prior to 1970 has not been available before, academics and stock market participants have not known the historical return that stock market investors in Finland could have achieved on their investments. The new stock market index presented in essay 4 makes it possible, for the first time, to calculate the historical average return on the Finnish stock market and to conduct further studies that require long time-series of data.

Nonlinear intrinsic instability of solid propellant combustion including gas-phase thermal inertia

The problem of homogeneous solid propellant combustion instability is studied with a one-dimensional flame model, including the effects of gas-phase thermal inertia and nonlinearity. Computational results presented in this paper show nonlinear instabilities inherent in the equations, due to which periodic burning is found even under steady ambient conditions such as pressure. The stability boundary is obtained in terms of Denison-Baum parameters. It is found that inclusion of gas-phase thermal inertia stabilizes the combustion. Also, the effect of a distributed heat release in the gas phase, compared to the flame sheet model, is to destabilize the burning. Direct calculations for finite amplitude pressure disturbances show that two distinct resonant modes exist, the first one near the natural frequency as obtained from intrinsic instability analysis and a second mode occurring at a much higher driving frequency. It is found that er rn in the low frequency region, the response of the propellant is significantly affected by the specific type of gas-phase chemical heat-release model employed. Examination of frequency response function reveals that the role of gas-phase thermal inertia is to stabilize the burning near the first resonant mode. Calculations made for different amplitudes of driving pressure show that the mean burning rate decreases with increasing amplitude. Also, with an increase in the driving amplitude, higher harmonics are generated in the burning rate.

Adhesion-Induced Instability in Asperities

Adhesive forces between two approaching asperities will deform the asperities, and under certain conditions this will result in a sudden runaway deformations leading to a jump-to-contact instability. We present finite element-based numerical studies on adhesion-induced deformation and instability in asperities. We consider the adhesive force acting on an asperity, when it is brought near a rigid half-space, due to van der Waals interaction between the asperity and the half-space. The adhesive force is considered to be distributed over the volume of the asperity (body force), thus resulting in more realistic simulations for the length scales considered. Iteration scheme based on a ``residual stress update'' algorithm is used to capture the effect of deformation on the adhesion force, and thereby the equilibrium configuration and the corresponding force. The numerical results are compared with the previous approximate analytical solutions for adhesion force, deformation of the asperity and adhesion-induced mechanical instability (jump-to-contact). It is observed that the instability can occur at separations much higher,and could possibly explain the higher value of instability separation observed in experiments. The stresses in asperities, particularly in case of small ones, are found to be high enough to cause yielding before jump -to-contact. The effect of roughness is considered by modeling a spherical protrusion on the hemispherical asperity.This small-scale roughness at the tip of the asperities is found to control the deformation behavior at small separations, and hence are important in determining the friction and wear due to the jump-to-contact instability.

Globalization and the Political : in the Borderlands with the Zapatista Movement

This study explores the meaning, content and significance of the political as manifest in the Mexican Zapatista movement as historically and geopolitically situated struggle. The case study undertakes a critical analysis of the development, organization, practice and discourse of the movement by drawing on fieldwork experiences, interviews, discussions, documents, films and other material produced by the movement, and the critical engagement with the research of others, especially in Latin America and Mexico. The dissertation poses the need to reconsider what constitutes and what we understand by the political , related particularly to the challenges provided by the critical globalization literature, decolonization and the study of social movements. The analysis encompasses several inter-related levels: the theoretical knowledge regarding the conceptualization of the political; the methodological level, regarding how such research can and should be conducted and knowledge claims formulated given the inescapable context and effects of global power relations; and the substantive level of adding specific information and analytical insights to existing knowledge of the Zapatista movement. As a result of conceptualization of a range of practices and processes, distinct understandings of the political can be underlined. Firstly, the conception of the indigenous and the struggles as indigenous movements as specifically political, not just a cultural or ethnic identity or a static quality but rather, an active consciousness integrally linked both to a longer history of oppression and as political articulation in the concrete context and lived experience of contemporary struggle. Secondly, the practice of autonomy as central to an understanding of the political in the context of the Zapatista struggle as a practical response to the situation of oppression, counter-insurgency, siege and conflict in Chiapas, as well as a positively informed mode of political self-understanding, expression and practice in its own right. Thirdly, the notion of geopolitical positioning as important to understanding of the political that encompasses the historicity of specific context and the power relations which shape that context, developed in two different ways: in regard to the positioning of the researcher and knowledge production with and about the Zapatistas, and in regard to the practice and knowledge of the Zapatistas as a decolonizing force in their encounters, interaction and relations with others, especially the global civil society. Finally, the role of silence, absence, invisibility, revelation and hiding in political practice as a deliberate strategy in response to oppressive power. -

Karyotype instability in the ponerine ant genus Diacamma

The queenless ponerine ant Diacamma ceylonense and a population of Diacamma from the Nilgiri hills which we refer to as `nilgiri', exhibit interesting similarities as well as dissimilarities. Molecular phylogenetic study of these morphologically almost similar taxa has shown that D ceylonense is closely related to `nilgiri' and indicates that `nilgiri' is a recent diversion in the Diacamma phylogenetic tree. However, there is a striking behavioural difference in the way reproductive monopoly is maintained by the respective gamergates (mated egg laying workers), and there is evidence that they are genetically differentiated, suggesting a lack of gene flow To develop a better understanding of the mechanism involved in speciation of Diacamma, we have analysed karyotypes of D. ceylonense and `nilgiri' In both, we found surprising inter-individual and intra-individual karyotypic mosaicism. The observed numerical variability, both at intra-individual and inter-individual levels, does not appear to have hampered the sustainability of the chromosomal diversity in each population under study Since the related D. indicum, displays no such intra-individual or inter-Individual variability whatsoever under identical experimental conditions, these results are unlikely to he artifacts. Although no known mechanisms can account for the observed karyotypic variability of this nature, we believe that the present findings on the ants under study would provide opportunities for exciting new discoveries concerning the origin, maintenance and significance of intra-individual and inter-individual karyotypic mosaicism.

A sufficient criterion for Rayleigh-Taylor instability of incompressible viscous three-layer flow

Using normal mode analysis Rayleigh-Taylor instability is investigated for three-layer viscous stratified incompressible steady flow, when the top 3rd and bottom 1st layers extend up to infinity, the middle layer has a small thickness δ. The wave Reynolds number in the middle layer is assumed to be sufficiently small. A dispersion relation (a seventh degree polynomial in wave frequency ω) valid up to the order of the maximal value of all possible Kj (j less-than-or-equals, slant 0, K is the wave number) in each coefficient of the polynomial is obtained. A sufficient condition for instability is found out for the first time, pursuing a medium wavelength analysis. It depends on ratios (α and β) of the coefficients of viscosity, the thickness of the middle layer δ, surface tension ratio T and wave number K. This is a new analytical criterion for Rayleigh-Taylor instability of three-layer fluids. It recovers the results of the corresponding problem for two-layer fluids. Among the results obtained, it is observed that taking the coefficients of viscosity of 2nd and 3rd layers same can inhibit the effect of surface tension completely. For large wave number K, the thickness of the middle layer should be correspondingly small to keep the domain of dependence of the threshold wave number Kc constant for fixed α, β and T.

A sufficient criterion for Kelvin–Helmholtz instability in the magnetopause boundary‐layer region

The Kelvin–Helmholtz instability has been investigated for the magnetopause boundary‐layer region by the linearized method. The plasma in magnetosheath and magnetopause is assumed to be semi‐infinitely extended homogeneous, nondissipative, and incompressible. It is observed that, if one relation of two plasma speeds on the two sides of the magnetopause, wave number, and boundary‐layer thickness exceeds a certain threshold, the instability sets in. This new analytically sufficient criterion for excitation of instability in the three‐layer plasma flow generalizes the corresponding Chandrasekhar’s instability criterion for two‐layer plasma flow. The known results have been recovered and modified, the new results have been discovered. It is proved that the velocity threshold for the onset of instability is low when the magnitude of the magnetosheath and boundary‐layer region magnetic field and the angle between them are small. Also the threshold depends on the direction of plasma flow. The following results are observed numerically. The growth of the instability is sensitive to the magnetic field direction in the magnetosheath. A slight variation in the magnetic field direction in the second region can substantially change the relative velocity threshold for instability. When the ratio of the density of the second and third layer (magnetosphere) increases or that of the first and third layer decreases, the threshold decreases. Apart from this a necessary criterion for instability is obtained for a particular case.

Magnetorotational instability driven dynamos at low magnetic Prandtl numbers

Numerical simulations of the magnetorotational instability (MRI) with zero initial net flux in a non-stratified isothermal cubic domain are used to demonstrate the importance of magnetic boundary conditions. In fully periodic systems the level of turbulence generated by the MRI strongly decreases as the magnetic Prandtl number (Pm), which is the ratio of kinematic viscosity and magnetic diffusion, is decreased. No MRI or dynamo action below Pm=1 is found, agreeing with earlier investigations. Using vertical field conditions, which allow magnetic helicity fluxes out of the system, the MRI is found to be excited in the range 0.1