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.

Screening Cycles

We demonstrate how endogenous information acquisition in credit markets creates lending cycles when competing banks undertake their screening decisions in an uncoordinated way, thereby highlighting the role of intertemporal screening externalities induced by lending market competition as a structural source of instability. We show that uncoordinated screening behavior of competing banks may be not only the source of an important financial multiplier, but also an independent source of fluctuations inducing business cycles. The screening cycle mechanism is robust to generalizations along many dimensions such as the lending market structure, the lending rate determination and the imperfections in the screening technology.

Information Sharing in Banking: A Collusive Device?

We show that information sharing among banks may serve as a collusive device. An informational sharing agreement is an a-priori commitment to reduce informational asymmetries between banks in future lending. Hence, information sharing tends to increase the intensity of competition in future periods and, thus, reduces the value of informational rents in current competition. We contribute to the existing literature by emphasizing that a reduction in informational rents will also reduce the intensity of competition in the current period, thereby reducing competitive pressure in current credit markets. We provide a large class of economic environments, where a ban on information sharing would be strictly welfare-enhancing.

Optimal reactive power dispatch based on voltage stability criteria in a large power system with AC/DC and FACTs devices

An algorithm for optimal allocation of reactive power in AC/DC system using FACTs devices, with an objective of improving the voltage profile and also voltage stability of the system has been presented. The technique attempts to utilize fully the reactive power sources in the system to improve the voltage stability and profile as well as meeting the reactive power requirements at the AC-DC terminals to facilitate the smooth operation of DC links. The method involves successive solution of steady-state power flows and optimization of reactive power control variables with Unified Power Flow Controller (UPFC) using linear programming technique. The proposed method has been tested on a real life equivalent 96-bus AC and a two terminal DC system under normal and contingency conditions.

Polarization relaxation, dielectric dispersion, and solvation dynamics in dense dipolar liquid

A unified treatment of polarization relaxation, dielectric dispersion and solvation dynamics in a dense, dipolar liquid is presented. It is shown that the information of solvent polarization relaxation that is obtained by macroscopic dielectric dispersion experiments is not sufficient to understand dynamics of solvation of a newly created ion or dipole. In solvation, a significant contribution comes from intermediate wave vector processes which depend critically on the short range (nearest‐neighbor) spatial and orientational order that are present in a dense, dipolar liquid. An analytic expression is obtained for the time dependent solvation energy that depends, in addition to the translational and rotational diffusion coefficients of the liquid, on the ratio of solute–solvent molecular sizes and on the microscopic structure of the polar liquid. Mean spherical approximation (MSA) theory is used to obtain numerical results for polarization relaxation, for wave vector and frequency dependent dielectric function and for time dependent solvation energy. We find that in the absence of translational contribution, the solvation of an ion is, in general, nonexponential. In this case, the short time decay is dominated by the longitudinal relaxation time but the long time decay is dominated by much slower large wave vector processes involving nearest‐neighbor molecules. The presence of a significant translational contribution drastically alters the decay behavior. Now, the long‐time behavior is given by the longitudinal relaxation time constant and the short time dynamics is controlled by the large wave vector processes. Thus, although the continuum model itself is conceptually wrong, a continuum model like result is recovered in the presence of a sizeable translational contribution. The continuum model result is also recovered in the limit of large solute to solvent size ratio. In the opposite limit of small solute size, the decay is markedly nonexponential (if the translational contribution is not very large) and a complete breakdown of the continuum model takes place. The significance of these results is discussed.

Transcriptional switching in Escherichia coli during stress and starvation by modulation of Sigma 70 activity

During active growth of Escherichia coli, majority of the transcriptional activity is carried out by the housekeeping sigma factor (Sigma 70), whose association with core RNAP is generally favoured because of its higher intracellular level and higher affinity to core RNAP. In order to facilitate transcription by alternative sigma factors during nutrient starvation, the bacterial cell uses multiple strategies by which the transcriptional ability of Sigma 70 is diminished in a reversible manner. The facilitators of shifting the balance in favour of alternative sigma factors happen to be as diverse as a small molecule (p)ppGpp (represents ppGpp or pppGpp), proteins (DksA, Rsd) and a species of RNA (6S RNA). Although 6S RNA and (p)ppGpp were known in literature for a long time, their role in transcriptional switching has been understood only in recent years. With themelucidation of function of DksA, a new dimension has been added to the phenomenon of stringent response. As the final outcome of actions of (p)ppGpp, DksA, 6S RNA and Rsd is similar, there is a need to analyse hese mechanisms in a collective manner. We review the recent trends in understanding the regulation of Sigma 70 by (p)ppGpp, DksA, Rsd and 6S RNA and present a case for evolving a unified model of RNAP redistribution during starvation by modulation of Sigma 70 activity in E. coli.

Which Narrative? The Case of the Narrative Subject in Fifteenth-Century Altarpieces

The development of the altarpiece towards the end of the late medieval period added a new decorous and conspicuously visual element to the church interior. The altarpiece became the prime location for iconic – i.e. non-narrative – images, but almost from the beginning narrative images were part of the altarpiece in the form of small-scale pictures placed underneath or next to an iconic image in the centre. In the fifteenth century the format of the altarpiece gradually changed, and simultaneously with the development of the unified picture field some new narrative subjects began to appear on the central panel as the main subject of the altarpiece. During the course of the fifteenth century, narrative subjects became increasingly frequent and accepted subjects for altarpieces. In this article I will focus on the problem of the narrative altarpiece, a seeming contradiction of terms. As narrative subjects were transferred from their usual location to the central field of the altarpiece, traditionally reserved for the iconic image, the narrative was included in a new context and expected to assume the function of the altarpiece. How did a narrative image function in this context, and what kind of audience did it serve? Since the questions involved in the issue are complex, I will focus on the biblical narrative of The Visitation as a case study, and use two well-known Florentine altarpieces from the fifteenth century as examples of the interpretative choices open to the viewers of these altarpieces.

“Empire is a state of mind” – Imagining Eurasia in Russia –

Työssäni tarkastelen venäläistä neo-euraasianistista liikettä ja tapoja joilla liikkeen aktivistit rakentavat Euraasiasta yhtenäistä kokonaisuutta ja imperiumia. Keskeisiä tutkimuskysymyksiäni ovat: Mikä imperiumi on ja mitkä ovat sen keskeisiä motivaatioita ja teemoja? Kuinka imperiumin idea rakentuu tai käsitetään ja tämän voi tulkita? Minkälaisia seurauksia voi tulkita heidän tavallaan Euraasia nähdä olevan? Materiaalina käytän haastatteluja, jotka on kerätty Moskovassa keväällä 2008, ja liikkeen kirjallisia tuotoksia (lehdet ja Internet -sivut). Neo-euraasianistisella liikkeellä tarkoitan tässä työssä Kansainvälistä Euraasianistista liikettä (Meždunarodnoe Evrazijskoe Dviženie) ja sen alahaaraa Euraasianistista Nuorisoliittoa (Evrazijskij Sojuz Molodëži). Liike perustettiin virallisesti 2003, mutta rakentaa vahvasti historiallista yhteyttä 1930 -luvun klassiseen eurasianismiin. Tämän lisäksi sen diskurssissa on paljon neuvostoliittolaisia, fasistisia, uuskonservatiivisia ja nationalistisia piirteitä. Liikkeen johtohahmo on filosofi-geopoliitikko Alexandr Dugin. Työn tausta-ajatuksena minua kiinnostaa etenkin nk. älymystön tai intelligenttien vaikutus nationalismiin tai sosiaalisia ryhmiä määrittelevien diskurssien kehitykseen ja muutokseen.Tarkastelen materiaalia diskurssianalyyttisesta näkökulmasta. Näen diskurssianalyysin sen tutkimisena, miten sosiaalista todellisuutta tuotetaan erilaisissa sosiaalisissa käytännöissä. Samalla näiden diskurssien tutkiminen, foucautlaisen perinteen myötä, tarkastelee kriittisesti niiden tuottamia (aktualisoituneita sekä potentiaalisia) valtasuhteita. Käytän työssäni myös Benedict Andersonin kuvitellun yhteisön (imagined communities) käsitettä, joka auttaa hahmottamaan tapaa, jolla tutkimuskohteeni rakentavat imperiumia yhteisönä. Aktivistien puheessa imperiumi (imperiâ) tulee esiin pääasiallisesti positiivisesti ja ”heidän omanaan,” kun taas termi imperialismi (imperializm) pääosin negatiivisena, liittyen etenkin keskeisenä vihollisena pidettyihin Yhdysvaltoihin. Esiin nousee monta toisiinsa liittyvää teemaa, jotka jaottelen viideksi pääteemaksi. Näistä tarkastelen lähemmin imperiumia ”kaikkien kansojen hyväntekijänä (poliittinen puoli)”, ulkoisen voiman lähteenä (historiallis-geopoliittinen puoli) sekä kollektiivisen subjektin luojana (imperialistis-nationalistinen puoli). Pyrin kontekstualisoimaan diskurssin ja tarkastelemaan tapoja, joilla se ammentaa motiiveja myös historiallis-kulttuurisista tavoista hahmottaa aluetta ja sen asukkaita. Käsittelen myös kansan, kansakunnan, etnoksen ja nationalismin käsitteitä ja sitä, miten ne nousevat neo-eurasianistisessa diskursissa esiin. Imperiaalisen nationalismin (imperskij nacionalizm) käsite auttaa ymmärtämään niitä tapoja, jolla liike tekee sekä pesäeroa nationalismiin että samalla hyödyntää monia nationalistisen diskurssin perusteemoja. Eräs liikkeen diskurssin keskeisistä eroista niin sanottuun nationalismin valtavirtaan on ”kansakunnan (naciâ)” käsitteen vahva negatiivinen konnotaatio. Sen vastakohtana esiin nostetaan vahvasti kansan (narod) käsite. Samalla kuitenkin etnisen venäläisen (russkij) käsitettä käytetään tavallista laajemmin ja kattavammin kuin tavallisesti, ja ennen kaikkea Venäjä nousee imperiumin keskeisimmäksi tekijäksi. Euraasialaiseen imperiumiin liitetyistä positiivistista mielikuvista käsittelen tarkemmin monikansallisuuden ja kansojen kodin ideaa, joka nousee mielestäni huomattavaksi retoriseksi taustaksi kaikessa materiaalissa. Tähän liittyy vahvasti myös saman teeman sivujuonne, eli imperiumin ”vapauttava” rooli. Tulkitsen, että liikkeen imperiumi -diskurssilla on instrumentaalinen luonne: se legitimoi aktivistien vaatimuksia varsinkin entisen Neuvostoliiton alueen suhteen. ”Euraasialaisen kansan” ajatus toimii mahdollisena Euraasiaa yhteisenä tekijänä ”Neuvostokansan” tilalla. Sen taustalla materiaalistani päätellen siintävät kuitenkin enemmänkin Venäjä ja venäläis -spesifit vaateet kuin koko Euraasia. Pohdin myös kansakunnan (nation) hyljeksimisen syitä ja käsitteen sopivuutta Venäjälle, kuten myös venäläisyyden käsitteiden kerrostuneisuutta. Kokonaisuudessaan imperiumi tuli esiin abstraktina, utopistisena ja ”totaalisena” kokonaisuutena.

Nonsingular cosmological models: the massive scalar field case

The nonminimal coupling of a massive self-interacting scalar field with a gravitational field is studied. Spontaneous symmetry breaking occurs in the open universe even when the sign on the mass term is positive. In contrast to grand unified theories, symmetry breakdown is more important for the early universe and it is restored only in the limit of an infinite expansion. Symmetry breakdown is shown to occur in flat and closed universes when the mass term carries a wrong sign. The model has a naturally defined effective gravitational coupling coefficient which is rendered time-dependent due to the novel symmetry breakdown. It changes sign below a critical value of the cosmic scale factor indicating the onset of a repulsive field. The presence of the mass term severely alters the behaviour of ordinary matter and radiation in the early universe. The total energy density becomes negative in a certain domain. These features make possible a nonsingular cosm

The superfluid as a source of all interactions

The superfluid state of fermion-antifermion fields developed in our previous papers is generalized to include higher orbital and spin states. In addition to single-particle excitations, the system is capable of having real and virtual bound or quasibound composite excitations which are akin to bosons of spinJ P equal to0 �, 1�, 2+, etc. These pseudoscalar, vector, and tensor bosons can be massive or massless and provide the vehicles for strong, electromagnetic, weak, and gravitational interactions. The concept that the basic (unmanifest) fermion-antifermion interaction can lead to a multiplicity of manifest interactions seems to provide a basis for a unified field theory.

Spin and mass content of linearized Poincaré gauge theories

A unified gauge theory of massless and massive spin-2 fields is of considerable current interest. The Poincaré gauge theories with quadratic Lagrangian are linearized, and the conditions on the parameters are found which will lead to viable linear theories with massive gauge particles. As well as the 2+ massless gravitons coming from the translational gauge potential, the rotational gauge potentials, in the linearized limit, give rise to 2+ and 2− particles of equal mass, as well as a massive pseudoscalar.

The Mechanics and Statistics of Active Matter

Active particles contain internal degrees of freedom with the ability to take in and dissipate energy and, in the process, execute systematic movement. Examples include all living organisms and their motile constituents such as molecular motors. This article reviews recent progress in applying the principles of nonequilibrium statistical mechanics and hydrodynamics to form a systematic theory of the behavior of collections of active particles-active matter-with only minimal regard to microscopic details. A unified view of the many kinds of active matter is presented, encompassing not only living systems but inanimate analogs. Theory and experiment are discussed side by side.

Helsingin seudun ruuhkamaksut yritysnäkökulmasta

Congestion of traffic is one of the biggest challenges for urban cities in global perspective. Car traffic and traffic jams are causing major problems and the congestion is predicted to worsen in the future. The greenhouse effect has caused a severe threat to the environment globally. On the other hand from the point of view of companies and other economic parties time and money has been lost because of the congestion of traffic. This work studies some possible traffic payment systems for the Helsinki Metropolitan area introducing three optional models and concentrating on the point of view of the economic parties. Central part of this work is formed by a research questionnaire, which was conducted among companies located in the Helsinki area and where more than 1000 responses were gained. The study researches the approaches of the respondents to the area s current traffic system, its development and urban congestion pricing and the answers are analyzed according to the size, industry and location of the companies. The economic aspect is studied by economic theory of industrial location and by emphasizing the meaning of smoothly running traffic for the economic world. Chapter three presents detailed information about traffic congestion, how today s car-centered society has been formed, what concrete things congestion means for economic life and how traffic congestion can be limited. Theoretically it is examined how urban traffic payment systems are working using examples from London and Stockholm where successful traffic payment experiences exist. The literature review analyzes urban development, increasing car traffic and Helsinki Metropolitan area on a structural point of view. The fourth chapter introduces a case study, which concentrates on Helsinki Metropolitan area s different structures, the congestion situation in Helsinki and the introduction of the traffic payment system clarification. Currently the region is experiencing a phase where big changes are happening in the planning of traffic. The traffic systems are being unified to consider the whole region in the future. Also different advices for the increasing traffic congestion problems are needed. Chapter five concentrates on the questionnaire and theme interviews and introduces the research findings. The respondents overall opinion of the traffic payments is quite skeptical. There were some regional differences found and especially taxi, bus and cargo and transit enterprises shared the most negative opinion. Economic parties were worried especially because of the traffic congestion is causing harm for the business travel and the employees traveling to and from work. According to the respondents the best option from the traffic payment models was the ring model where the payment places would be situated inside the Ring Road III. Both the company representatives and other key decision makers see public transportation as a good and powerful tool to decrease traffic congestion. The only question, which remains, is where to find investors willing to invest in public transportation if economic representatives do not believe in pricing the traffic by for example traffic payment systems.

Simulation and graph mining tools for improving gene mapping efficiency

Gene mapping is a systematic search for genes that affect observable characteristics of an organism. In this thesis we offer computational tools to improve the efficiency of (disease) gene-mapping efforts. In the first part of the thesis we propose an efficient simulation procedure for generating realistic genetical data from isolated populations. Simulated data is useful for evaluating hypothesised gene-mapping study designs and computational analysis tools. As an example of such evaluation, we demonstrate how a population-based study design can be a powerful alternative to traditional family-based designs in association-based gene-mapping projects. In the second part of the thesis we consider a prioritisation of a (typically large) set of putative disease-associated genes acquired from an initial gene-mapping analysis. Prioritisation is necessary to be able to focus on the most promising candidates. We show how to harness the current biomedical knowledge for the prioritisation task by integrating various publicly available biological databases into a weighted biological graph. We then demonstrate how to find and evaluate connections between entities, such as genes and diseases, from this unified schema by graph mining techniques. Finally, in the last part of the thesis, we define the concept of reliable subgraph and the corresponding subgraph extraction problem. Reliable subgraphs concisely describe strong and independent connections between two given vertices in a random graph, and hence they are especially useful for visualising such connections. We propose novel algorithms for extracting reliable subgraphs from large random graphs. The efficiency and scalability of the proposed graph mining methods are backed by extensive experiments on real data. While our application focus is in genetics, the concepts and algorithms can be applied to other domains as well. We demonstrate this generality by considering coauthor graphs in addition to biological graphs in the experiments.

Constructing a Community : Myths and Realities of the Open Development Model

The open development model of software production has been characterized as the future model of knowledge production and distributed work. Open development model refers to publicly available source code ensured by an open source license, and the extensive and varied distributed participation of volunteers enabled by the Internet. Contemporary spokesmen of open source communities and academics view open source development as a new form of volunteer work activity characterized by hacker ethic and bazaar governance . The development of the Linux operating system is perhaps the best know example of such an open source project. It started as an effort by a user-developer and grew quickly into a large project with hundreds of user-developer as contributors. However, in hybrids , in which firms participate in open source projects oriented towards end-users, it seems that most users do not write code. The OpenOffice.org project, initiated by Sun Microsystems, in this study represents such a project. In addition, the Finnish public sector ICT decision-making concerning open source use is studied. The purpose is to explore the assumptions, theories and myths related to the open development model by analysing the discursive construction of the OpenOffice.org community: its developers, users and management. The qualitative study aims at shedding light on the dynamics and challenges of community construction and maintenance, and related power relations in hybrid open source, by asking two main research questions: How is the structure and membership constellation of the community, specifically the relation between developers and users linguistically constructed in hybrid open development? What characterizes Internet-mediated virtual communities and how can they be defined? How do they differ from hierarchical forms of knowledge production on one hand and from traditional volunteer communities on the other? The study utilizes sociological, psychological and anthropological concepts of community for understanding the connection between the real and the imaginary in so-called virtual open source communities. Intermediary methodological and analytical concepts are borrowed from discourse and rhetorical theories. A discursive-rhetorical approach is offered as a methodological toolkit for studying texts and writing in Internet communities. The empirical chapters approach the problem of community and its membership from four complementary points of views. The data comprises mailing list discussion, personal interviews, web page writings, email exchanges, field notes and other historical documents. The four viewpoints are: 1) the community as conceived by volunteers 2) the individual contributor s attachment to the project 3) public sector organizations as users of open source 4) the community as articulated by the community manager. I arrive at four conclusions concerning my empirical studies (1-4) and two general conclusions (5-6). 1) Sun Microsystems and OpenOffice.org Groupware volunteers failed in developing necessary and sufficient open code and open dialogue to ensure collaboration thus splitting the Groupware community into volunteers we and the firm them . 2) Instead of separating intrinsic and extrinsic motivations, I find that volunteers unique patterns of motivations are tied to changing objects and personal histories prior and during participation in the OpenOffice.org Lingucomponent project. Rather than seeing volunteers as a unified community, they can be better understood as independent entrepreneurs in search of a collaborative community . The boundaries between work and hobby are blurred and shifting, thus questioning the usefulness of the concept of volunteer . 3) The public sector ICT discourse portrays a dilemma and tension between the freedom to choose, use and develop one s desktop in the spirit of open source on one hand and the striving for better desktop control and maintenance by IT staff and user advocates, on the other. The link between the global OpenOffice.org community and the local end-user practices are weak and mediated by the problematic IT staff-(end)user relationship. 4) Authoring community can be seen as a new hybrid open source community-type of managerial practice. The ambiguous concept of community is a powerful strategic tool for orienting towards multiple real and imaginary audiences as evidenced in the global membership rhetoric. 5) The changing and contradictory discourses of this study show a change in the conceptual system and developer-user relationship of the open development model. This change is characterized as a movement from hacker ethic and bazaar governance to more professionally and strategically regulated community. 6) Community is simultaneously real and imagined, and can be characterized as a runaway community . Discursive-action can be seen as a specific type of online open source engagement. Hierarchies and structures are created through discursive acts. Key words: Open Source Software, open development model, community, motivation, discourse, rhetoric, developer, user, end-user