Railway Wagon Market Analysis and New Multi-Purpose Wagon Solution for Freight Transports - Finnish Manufacturing Perspective

Rautateillä käytettävät tavaravaunut ovat vanhenemassa hyvin nopeasti; tämä koskee niin Venäjää, Suomea, Ruotsia kuin laajemminkin Eurooppaa. Venäjällä ja Euroopassa on käytössä runsaasti vaunuja, jotka ovat jo ylittäneet niille suositeltavan käyttöiän. Silti niitä käytetään kuljetuksissa, kun näitä korvaavia uusia vaunuja ei ole tarpeeksi saatavilla. Uusimmat vaunut ovat yleensä vaunuja vuokraavien yritysten tai uusien rautatieoperaattorien hankkimia - tämä koskee erityisesti Venäjää, jossa vaunuvuokraus on noussut erittäin suosituksi vaihtoehdoksi. Ennusteissa kerrotaan vaunupulan kasvavan ainakin vuoteen 2010 saakka. Jos rautateiden suosio rahtikuljetusmuotona kasvaa, niin voimistuva vaunukysyntä jatkuu huomattavan paljon pidemmän aikaa. Euroopan ja Venäjän vaunukannan tilanne näkyy myös sitä palvelevan konepajateollisuuden ongelmina - yleisesti ottaen alan eurooppalaiset yritykset ovat heikosti kannattavia ja niiden liikevaihto ei juuri kasva, venäläiset ja ukrainalaiset yritykset ovat olleet samassa tilanteessa, joskin aivan viime vuosina tilanne on osassa kääntynyt paremmaksi. Kun näiden maanosien yritysten liikevaihtoa, voittoa ja omistaja-arvoa verrataan yhdysvaltalaisiin kilpailijoihin, huomataan että jälkimmäisten suoriutuminen on huomattavan paljon parempaa, ja näillä yrityksillä on myös kyky maksaa osinkoja omistajilleen. Tutkimuksen tarkoituksena oli kehittää uuden tyyppinen kuljetusvaunu Suomen, Venäjän sekä mahdollisesti myös Kiinan väliseen liikenteeseen. Vaunutyypin tarkoituksena olisi kyetä toimimaan monikäyttöisenä, niin raaka-aineiden kuin konttienkin kuljetuksessa, tasapainottaen kuljetusmuotojen aiheuttamaa kuljetuspaino-ongelmaa. Kehitystyön pohjana käytimme yli 1000 venäläisen vaunutyypin tietokantaa, josta valitsimme Data Envelopment Analysis -menetelmällä soveliaimmat vaunut kontinkuljetukseen (lähemmin tarkastelimme n. 40 vaunutyyppiä), jättäen mahdollisimman vähän tyhjää tilaa junaan, mutta silti kyeten kantamaan valitun konttilastin. Kun kantokykyongelmia venäläisissä vaunuissa ei useinkaan ole, on vertailu tehtävissä tavarajunan pituuden ja kokonaispainon perusteella. Simuloituamme yhdistettyihin kuljetuksiin soveliasta vaunutyyppiä käytännössä löytyvässä kuljetusverkostossa (esim. raakapuuta Suomeen tai Kiinaan ja kontteja takaisin Venäjän suuntaan), huomasimme lyhemmän vaunupituuden sisältävän kustannusetua, erityisesti raakaainekuljetuksissa, mutta myös rajanylityspaikkojen mahdollisesti vähentyessä. Lyhempi vaunutyyppi on myös joustavampi erilaisten konttipituuksien suhteen (40 jalan kontin käyttö on yleistynyt viime vuosina). Työn lopuksi ehdotamme uuden vaunutyypin tuotantotavaksi verkostomaista lähestymistapaa, jossa osa vaunusta tehtäisiin Suomessa ja osa Venäjällä ja/tai Ukrainassa. Vaunutyypin tulisi olla rekisteröity Venäjälle, sillä silloin sitä voi käyttää Suomen ja Venäjän, kuten myös soveltuvin osin Venäjän ja Kiinan välisessä liikenteessä.

Clustering and International Competitiveness of Information Technology Industry in the Saint Petersburg Area

The main objective of this study is to assess the potential of the information technology industry in the Saint Petersburg area to become one of the new key industries in the Russian economy. To achieve this objective, the study analyzes especially the international competitiveness of the industry and the conditions for clustering. Russia is currently heavily dependent on its natural resources, which are the main source of its recent economic growth. In order to achieve good long-term economic performance, Russia needs diversification in its well-performing industries in addition to the ones operating in the field of natural resources. The Russian government has acknowledged this and started special initiatives to promote such other industries as information technology and nanotechnology. An interesting industry that is basically less than 20 years old and fast growing in Russia, is information technology. Information technology activities and markets are mainly concentrated in Russia’s two biggest cities, Moscow and Saint Petersburg, and areas around them. The information technology industry in the Saint Petersburg area, although smaller than Moscow, is especially dynamic and is gaining increasing foreign company presence. However, the industry is not yet internationally competitive as it lacks substantial and sustainable competitive advantages. The industry is also merely a potential global information technology cluster, as it lacks the competitive edge and a wide supplier and manufacturing base and other related parts of the whole information technology value system. Alone, the industry will not become a key industry in Russia, but it will, on the other hand, have an important supporting role for the development of other industries. The information technology market in the Saint Petersburg area is already large and if more tightly integrated to Moscow, they will together form a huge and still growing market sufficient for most companies operating in Russia currently and in the future. Therefore, the potential of information technology inside Russia is immense.

State of Logistics and Operations Management in Finnish and Swedish Companies – Survey Research Findings

In this research we are examining what is the status of logistics and operations management in Finnish and Swedish companies. Empirical data is based on the web based questionnaire, which was completed in the end of 2007 and early 2008. Our examination consists of roughly 30 answers from largest manufacturing (highest representation in our sample), trade and logistics/distribution companies. Generally it could be argued that these companies operate in complex environment, where number of products, raw materials/components and suppliers is high. However, usually companies rely on small amount of suppliers per raw material/component (highest frequency is 2), and this was especially the case among Swedish companies, and among those companies, which favoured overseas sourcing. Sample consisted of companies which mostly are operating in an international environment, and are quite often multinationals. Our survey findings reveal that companies in general have taken logistics and information technology as part of their strategy process; utilization of performance measures as well as system implementations have followed the strategy decisions. In the transportation mode side we identify that road transports dominate all transport flow classes (inbound, internal and outbound), followed by sea and air. Surprisingly small amount of companies use railways, but in general we could argue that Swedish companies prefer this mode over Finnish counterparts. With respect of operations outsourcing, we found that more traditional areas of logistics outsourcing are driving factors in company's performance measurement priority. In contrary to previous research, our results indicate that the scope of outsourcing is not that wide in logistics/operations management area, and companies are not planning to outsource more in the near future. Some support is found for more international operations and increased outsourcing activity. From the increased time pressure of companies, we find evidence that local as well as overseas customers expect deliveries within days or weeks, but suppliers usually supply within weeks or months. So, basically this leads into considerable inventory holding. Interestingly local and overseas sourcing strategy does not have that great influence on lead time performance of these particular sourcing areas - local strategy is anyway considerably better in responding on market changes due to shorter supply lead times. In the end of our research work we have completed correlation analysis concerning items asked with Likert scale. Our analysis shows that seeing logistics more like a process rather than function, applying time based management, favouring partnerships and measuring logistics within different performance dimensions results on preferred features and performance found in logistics literature.

Partnering in the Dynamic Environment: The Role of Trust in Asymmetric Technology Partnership Formation

The purpose of this study was to increase the understanding of the role and nature of trust in asymmetric technology partnership formation. In the knowledge-based "learning race" knowledge is considered as a primary source for competitive advantage. In the emerging ICT sector the high pace of technological change, the convergence of technologies and industries as well as the increasing complexity and uncertainty have forced even the largest players to seek cooperation for complementary knowledge and capabilities. Small technology firms need the complementary resources and legitimacy of the large firms to grow and compete in the global market place. Most of the earlier research indicates, however, that partnerships with asymmetric size, managerial resources and cultures have failed. A basic assumption supported by earlier research was that trust is a critical factor in asymmetric technology partnership formation. Asymmetric technology partnership formation is a dynamic and multi-dimensional process, and consequently a holistic research approach was selected. Research issue was approached from different levels: the individual decision-maker, the firm and the relationship between the parties. Also the impact of the dynamic environment and technology content was analyzed. A multitheoretical approach and a qualitative research method with in-depth interviews in five large ICT companies and eight small ICT companies enabled a holistic and rich view of the research issue. Study contributes on the scarce understanding on the nature and evolution of trust in asymmetric technology partnership formation. It sheds also light on the specific nature of asymmetric technology partnerships. The partnerships were found to be tentative and the diverse strategic intent of small and large technology firms appeared as a major challenge. The role of the boundary spanner was highlighted as a possibility to match the incompatible organizational cultures. A shared vision was found to be a pre-condition for individual-based fast trust leading to intuitive decision-making and experimentation. The relationships were tentative and they were continuously re-evaluated through the key actors' sense making of the technology content, asymmetry and the dynamic environment. A multi-dimensional conceptualization for trust was created and propositions on the role and nature of trust for further research are given. The purpose of this study was to increase the understanding of the role and nature of trust in asymmetric technology partnership formation. In the knowledge-based "learning race" knowledge is considered as a primary source for competitive advantage. In the emerging ICT sector the high pace of technological change, the convergence of technologies and industries as well as the increasing complexity and uncertainty have forced even the largest players to seek cooperation for complementary knowledge and capabilities. Small technology firms need the complementary resources and legitimacy of the large firms to grow and compete in the global market place. Most of the earlier research indicates, however, that partnerships with asymmetric size, managerial resources and cultures have failed. A basic assumption supported by earlier research was that trust is a critical factor in asymmetric technology partnership formation. Asymmetric technology partnership formation is a dynamic and multi-dimensional process, and consequently a holistic research approach was selected. Research issue was approached from different levels: the individual decision-maker, the firm and the relationship between the parties. Also the impact of the dynamic environment and technology content was analyzed. A multitheoretical approach and a qualitative research method with in-depth interviews in five large ICT companies and eight small ICT companies enabled a holistic and rich view of the research issue. Study contributes on the scarce understanding on the nature and evolution of trust in asymmetric technology partnership formation. It sheds also light on the specific nature of asymmetric technology partnerships. The partnerships were found to be tentative and the diverse strategic intent of small and large technology firms appeared as a major challenge. The role of the boundary spanner was highlighted as a possibility to match the incompatible organizational cultures. A shared vision was found to be a pre-condition for individual-based fast trust leading to intuitive decision-making and experimentation. The relationships were tentative and they were continuously re-evaluated through the key actors' sense making of the technology content, asymmetry and the dynamic environment. A multi-dimensional conceptualization for trust was created and propositions on the role and nature of trust for further research are given.

Clustering and international competitiveness of information technology industry in the Saint Petersburg area

The main objective of this study is to assess the potential of the information technology industry in the Saint Petersburg area to become one of the new key industries in the Russian economy. To achieve this objective, the study analyzes especially the international competitiveness of the industry and the conditions for clustering. Russia is currently heavily dependent on its natural resources, which are the main source of its recent economic growth. In order to achieve good long-term economic performance, Russia needs diversification in its well-performing industries in addition to the ones operating in the field of natural resources. The Russian government has acknowledged this and started special initiatives to promote such other industries as information technology and nanotechnology. An interesting industry that is basically less than 20 years old and fast growing in Russia, is information technology. Information technology activities and markets are mainly concentrated in Russia’s two biggest cities, Moscow and Saint Petersburg, and areas around them. The information technology industry in the Saint Petersburg area, although smaller than Moscow, is especially dynamic and is gaining increasing foreign company presence. However, the industry is not yet internationally competitive as it lacks substantial and sustainable competitive advantages. The industry is also merely a potential global information technology cluster, as it lacks the competitive edge and a wide supplier and manufacturing base and other related parts of the whole information technology value system. Alone, the industry will not become a key industry in Russia, but it will, on the other hand, have an important supporting role for the development of other industries. The information technology market in the Saint Petersburg area is already large and if more tightly integrated to Moscow, they will together form a huge and still growing market sufficient for most companies operating in Russia currently and in the future. Therefore, the potential of information technology inside Russia is immense.

Governance mode vs. governance fit: Performance implications of make-or-ally choices for product innovation in the worldwide aircraft industry, 1942-2000

We examine the impact of governance mode and governance fit on performance in make-or-ally decisions. We argue that while horizontal collaboration and autonomous governance have direct and countervailing performance implications, the alignment of make-or-ally choices with the focal firm's resource endowment and the activity's resource requirements leads to better performance. Data on the aircraft industry show that relative to aircraft developed autonomously, collaborative aircraft exhibit greater sales but require longer time-to-market. However, governance fit increases unit sales and reduces time-to-market. We contribute to the alliance and economic organization literatures. (Copyright © 2013 John Wiley & Sons, Ltd.)

Factors influencing the evolution of e-commerce : an empirical analysis in a developed market economy

Peer-reviewed

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.

Use of innovative High Voltage components in GOST standard market

In Russian there are more than twenty thousand primary substations 35/110 kV and 10/110 kV. According to the Government Plan of Power Industry Development until 2020 year more than hundred new substations will e installed every year and even more renewed. The goal of this Thesis is to find out in this business environment what are the technology opportunities of prefabricated substation modules in new substation or in modernization of old substations in Russia.

Market Potential of Northwest Russia for Telemedicine Applications

The level of health care in Russia is mostly still below the western standards, but lately it has been developing quite positively. Many ICT solutions (telemedicine applications) have been developed for health care in Finland, but since the domestic market is so small, it’s necessary to expand to foreign markets to make the Finnish R&D projects more profitable. Telemedicine applications are not yet widely used in Russia, but since the health care system is going through fast changes, leapfrog effects can be expected and new modern applications and technologies will be implemented. This will open numerous business opportunities for Finnish technology developers. This thesis aims to be the first evaluation of the market and form an outlook of the health care system and telemedicine applications already utilized in Russia. The results of this study can be used for focusing further research ultimately aiming at technology implementation. The study showed that there is potential for many types of telemedicine solutions, e.g. electronic patient records and home monitoring systems; providing that further research in this field is needed.

Market Potential of Northwest Russia for Telemedicine Applications

The level of health care in Russia is mostly still below the western standards, but lately it has been developing quite positively. Many ICT solutions (telemedicine applications) have been developed for health care in Finland, but since the domestic market is so small, it’s necessary to expand to foreign markets to make the Finnish R&D projects more profitable. Telemedicine applications are not yet widely used in Russia, but since the health care system is going through fast changes, leapfrog effects can be expected and new modern applications and technologies will be implemented. This will open numerous business opportunities for Finnish technology developers. This thesis aims to be the first evaluation of the market and form an outlook of the health care system and telemedicine applications already utilized in Russia. The results of this study can be used for focusing further research ultimately aiming at technology implementation. The study showed that there is potential for many types of telemedicine solutions, e.g. electronic patient records and home monitoring systems; providing that further research in this field is needed.

Market Opportunities for Paper Industry in Radio Frequency Identification

The paper industry has been experiencing remarkable structural changes since paper demand growth has ceased and some markets are declining. One reason behind the declined demand is the Internet, which has partially substituted the newspaper as a source of information. Paper products alone can no longer provide livelihood, and the paper industry has to find new business areas. In this research, we studied radio frequency identification (RFID), and the market opportunities it could provide for paper industry. The research combined a quantitative industry analysis and qualitative interviews. RFID is a growing industry in the beginning of its life cycle, in which value chains and technologies still evolve significantly. The industry is going to concentrate on the future, and in the long term RFID-identifiers will probably be printed on paper substrate or directly onto products. Paper industry has the chance to enter the RFID industry, but it has to obtain the required competences, for example through acquisitions. The business potential RFID offers to paper industry is inadequate, and while reviewing new strategic options, the paper industry must consider more options, for example the entire printed intelligence.

Creating Global Competitive Advantage by Global Product Technology Transfers

Globalization is the trend which is realized in all areas in today’s business world. Pressure for cost reduction, changes in market situation and available scale economies have changed business environment more global than ever. To respond to new situation, companies are establishing global strategies. In this thesis, available global competitive advantages in electrical machine industry are studied in context of gaining them by global technology transfers. In theory part, establishing global strategy and competitive advantage is considered with connection to global sourcing and supply chain management. Additionally, market development in 21st century and its impact on global strategies is studied. In practice, global manufacturing is enabled by technology transfer projects. Smooth and fast project implementation enables faster and more flexible production ramp up. By starting the production available competitive advantages can be realized. In this thesis the present situation of technology transfer projects and the risks and advantages related to global manufacturing are analyzed. The analysis of implemented technology transfer projects indicates that project implementation is in good level. For further development of project execution 10 minor suggestions could be presented with two major ones: higher level standardization and development of product information model to support better global manufacturing.

Essays on pricing of risk and international linkage of Russian stock market

Last two decades have seen a rapid change in the global economic and financial situation; the economic conditions in many small and large underdeveloped countries started to improve and they became recognized as emerging markets. This led to growth in the amounts of global investments in these countries, partly spurred by expectations of higher returns, favorable risk-return opportunities, and better diversification alternatives to global investors. This process, however, has not been without problems and it has emphasized the need for more information on these markets. In particular, the liberalization of financial markets around the world, globalization of trade and companies, recent formation of economic and regional blocks, and the rapid development of underdeveloped countries during the last two decades have brought a major challenge to the financial world and researchers alike. This doctoral dissertation studies one of the largest emerging markets, namely Russia. The motivation why the Russian equity market is worth investigating includes, among other factors, its sheer size, rapid and robust economic growth since the turn of the millennium, future prospect for international investors, and a number of important major financial reforms implemented since the early 1990s. Another interesting feature of the Russian economy, which gives motivation to study Russian market, is Russia’s 1998 financial crisis, considered as one of the worst crisis in recent times, affecting both developed and developing economies. Therefore, special attention has been paid to Russia’s 1998 financial crisis throughout this dissertation. This thesis covers the period from the birth of the modern Russian financial markets to the present day, Special attention is given to the international linkage and the 1998 financial crisis. This study first identifies the risks associated with Russian market and then deals with their pricing issues. Finally some insights about portfolio construction within Russian market are presented. The first research paper of this dissertation considers the linkage of the Russian equity market to the world equity market by examining the international transmission of the Russia’s 1998 financial crisis utilizing the GARCH-BEKK model proposed by Engle and Kroner. Empirical results shows evidence of direct linkage between the Russian equity market and the world market both in regards of returns and volatility. However, the weakness of the linkage suggests that the Russian equity market was only partially integrated into the world market, even though the contagion can be clearly seen during the time of the crisis period. The second and the third paper, co-authored with Mika Vaihekoski, investigate whether global, local and currency risks are priced in the Russian stock market from a US investors’ point of view. Furthermore, the dynamics of these sources of risk are studied, i.e., whether the prices of the global and local risk factors are constant or time-varying over time. We utilize the multivariate GARCH-M framework of De Santis and Gérard (1998). Similar to them we find price of global market risk to be time-varying. Currency risk also found to be priced and highly time varying in the Russian market. Moreover, our results suggest that the Russian market is partially segmented and local risk is also priced in the market. The model also implies that the biggest impact on the US market risk premium is coming from the world risk component whereas the Russian risk premium is on average caused mostly by the local and currency components. The purpose of the fourth paper is to look at the relationship between the stock and the bond market of Russia. The objective is to examine whether the correlations between two classes of assets are time varying by using multivariate conditional volatility models. The Constant Conditional Correlation model by Bollerslev (1990), the Dynamic Conditional Correlation model by Engle (2002), and an asymmetric version of the Dynamic Conditional Correlation model by Cappiello et al. (2006) are used in the analysis. The empirical results do not support the assumption of constant conditional correlation and there was clear evidence of time varying correlations between the Russian stocks and bond market and both asset markets exhibit positive asymmetries. The implications of the results in this dissertation are useful for both companies and international investors who are interested in investing in Russia. Our results give useful insights to those involved in minimising or managing financial risk exposures, such as, portfolio managers, international investors, risk analysts and financial researchers. When portfolio managers aim to optimize the risk-return relationship, the results indicate that at least in the case of Russia, one should account for the local market as well as currency risk when calculating the key inputs for the optimization. In addition, the pricing of exchange rate risk implies that exchange rate exposure is partly non-diversifiable and investors are compensated for bearing the risk. Likewise, international transmission of stock market volatility can profoundly influence corporate capital budgeting decisions, investors’ investment decisions, and other business cycle variables. Finally, the weak integration of the Russian market and low correlations between Russian stock and bond market offers good opportunities to the international investors to diversify their portfolios.

Market of biomass fuels in Finland : IEA Bioenergy Task 40 and EUBIONET III - Country report of Finland 2009

This study considered the current situation of solid and liquid biomass fuels in Finland. The fact that industry consumes more than half of the total primary energy, widely applied combined heat and power production and a high share of solid biomass fuels in the total energy consumption are specific to the Finnish energy system. Wood is the most important source of bioenergy in Finland, representing 20% of the total energy consumption in 2007. Almost 80% of the woodbased energy is recovered from industrial by-products and residues. As a member of the European Union, Finland has committed itself to the Union’s climate and energy targets, such as reducing its overall emissions of green house gases to at least 20% below 1990 levels by 2020, and increasing the share of renewable energy in the gross final consumption. The renewable energy target approved for Finland is 38%. The present National Climate and Energy Strategy was introduced in November 2008. The strategy covers climate and energy policy measures up to 2020, and in brief thereafter, up to 2050. In recent years, the actual emissions have exceeded the Kyoto commitment and the trend of emissions is on the increase. In 2007, the share of renewable energy in the gross final energy consumption was approximately 25% (360 PJ). Without new energy policy measures, the final consumption of renewable energy would increase to 380 PJ, which would be approximately only 31% of the final energy consumption. In addition, green house gas emissions would exceed the 1990 levels by 20%. Meeting the targets will need the adoption of more active energy policy measures in coming years. The international trade of biomass fuels has a substantial importance for the utilisation of bioenergy in Finland. In 2007, the total international trading of solid and liquid biomass fuels was approximately 77 PJ, of which import was 62 PJ. Most of the import is indirect and takes place within the forest industry’s raw wood imports. In 2007, as much as 21% of wood energy was based on foreign-origin wood. Wood pellets and tall oil form the majority of export streams of biomass fuels. The indirect import of wood fuels peaked in 2006 to 61 PJ. The foreseeable decline in raw wood import to Finland will decrease the indirect import of wood fuels. In 2004– 2007, the direct trade of solid and liquid biomass fuels has been on a moderate growth path. In 2007, the import of palm oil and export of bio-diesel emerged, as a large, 170 000 t/yr biodiesel plant came into operation in Porvoo.