Does social capital reinforce technological inputs in the creation of knowledge? Evidence from the Spanish regions

In this paper we seek to verify the hypothesis that trust and cooperation between individuals, and between them and public institutions, can encourage technological innovation and the adoption of knowledge. Additionally, we test the extent to which the interaction of social capital with human capital and R&D expenditures improve their effect on a region’s ability to innovate. Our empirical evidence is taken from the Spanish regions and employs a knowledge production function and longitudinal count data models. Our results suggest that social capital correlates positively with innovation. Further, our analysis reveals a powerful interaction between human and social capital in the production of knowledge, whilst the complementarity with R&D efforts would seem less clear.

Decomposing differences in total factor productivity across firm size

This paper investigates the extent to which the gap in total factor productivity between small and large firms is due to differences in the endowment of factors determining productivity and to the returns associated with these factors. We place particular emphasis on the contribution of differences in the propensity to innovate and in the use of skilled labor across firms of different size. Empirical evidence from a representative sample of Spanish manufacturing firms corroborates that both differences in endowments and returns to innovation and skilled labor significantly contribute to the productivity gap between small and large firms. In addition, it is observed that the contribution of innovation to this gap is caused only by differences in quantity, while differences in returns have no effect; in the case of human capital, however, most of the effect can be attributed to increasing differences in returns between small and large firms.

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.

Knowledge misallocation and growth

We develop a growth model where knowledge is embodied in individuals and diffused across sectors through labor mobility. The existence of labor mobility costs constrains mobility and, thus, generates labor misallocation. Different levels of labor misallocation imply different levels of exploitation of available knowledge and, therefore, different total factor productivity across countries. We derive a positive relationship between growth and labor mobility, which is consistent with the empirical evidence, by assuming aggregate constant returns to capital. We also analyze the short and long run effects of labor mobility costs in the case of decreasing returns to capital. It turns out that changes in mobility costs have larger economic effects when different types of worker have small rather than large complementarities. Finally, we show that different labor income taxes or labor market tightness imply different rates of labor mobility and, therefore, can explain differences in Gross Domestic Product across countries.

Management Estratégico. Su aplicación en la Gestión del Conocimiento y el Capital Humano

Es un libro en el que he tratado de destacar la cada día mayor vinculación existente entre las personas y el logro de la misión u objetivo supremo de la empresa. En la actualidad y en los próximos años, es imposible pensar que la empresa pueda alcanzar su misión sin una adecuada coordinación entre las personas y la estructura organizativa, teniendo en cuenta que el conocimiento es la base de todo ello lográndose a través de una determinada estrategia.

Local human capital and productivity: An analysis for Spanish regions

In this paper, we examine the relationship between the stock of human capital and productivity in the Spanish regions (NUTS III), and assess whether the transmission channel involves external economies. The empirical evidence points to a positive relationship between the two variables, although it cannot be explained in terms of the impact of exogenous local human capital external economies, but rather in terms of other demand factors.

Capital Structure of Finnish SMEs and Financial Constraints

This thesis studies capital structure of Finnish small and medium sized enterprises. The specific object of the study is to test whether financial constraints have an effect on capital structure. In addition influences of several other factors were studied. Capital structure determinants are formulated based on three capital structure theories. The tradeoff theory and the agency theory concentrate on the search of optimal capital structure. The pecking order theory concerns favouring on financing source over another. The data of this study consists of financial statement data and results of corporate questionnaire. Regression analysis was used to find out the effects of several determinants. Regression models were formed based on the presented theories. Short and long term debt ratios were considered separately. The metrics of financially constrained firms was included in all models. It was found that financial constrains have a negative and significant effect to short term debt ratios. The effect was negative also to long term debt ratio but not statistically significant. Other considerable factors that influenced debt ratios were fixed assets, age, profitability, single owner and sufficiency of internal financing.

La tributación de las rentas de capital en los Estados miembros de la Comunidad Europea

El artículo trata sobre la tributación de las rentas de capital de los estados miembros de la Comunidad Europea en lo referente a intereses y dividendos y en lo que afecta a variaciones patrimoniales.

The Management of Intellectual Capital in the Early Phases of Project Marketing

This study aims at enhancing understanding and deriving new constructs about the management of intellectual capital in the early phases of project marketing. The research methodology employed is deductive; conceptual reasoning is based on existing literature. The study's knowledge base is drawn from the bodies of literature dealing with project, relationship, and industrial marketing, as well as from the literature dealing with mechanical engineering, network approach, systems selling, R&D, project portfolio, strategic, financial, and knowledge management. As a result, three processes, 32 summaries and 19 conclusions give to the management of intellectual capital meaning in the context of project marketing. These conclusions and synthesis are proposed to improve the existing concepts and models in project marketing.

Workplace Social Capital and Employee Health

Työyhteisön sosiaalinen pääoma ja työntekijöiden terveys Monien tutkimusten mukaan sosiaalinen pääoma vaikuttaa terveyteen. Vaikka työssä käyvä väestönosa on merkittävän osan valveillaoloajastaan työyhteisössä, siellä kertyvää sosiaalista pääomaa on toistaiseksi tutkittu vähän. Tässä tutkimuksessa selvitettiin työyhteisön sosiaalisen pääoman ja kuntatyöntekijöiden terveyden välistä yhteyttä pitkittäisasetelmassa hyödyntäen Kuntasektorin henkilöstön seurantatutkimuksen aineistoa vuosilta 2000–2005. Yhteensä 48592 kuntatyöntekijää vastasi kyselyyn vuosina 2000–02 (vastausprosentti 68 %). Heistä 35914 (77 %) osallistui myös seurantatutkimukseen vuosina 2004–05. Tutkimuksessa kehitettiin kyselyyn perustuva työyhteisön sosiaalisen pääoman mittausmenetelmä. Työntekijän omaan arvioon perustuvan sosiaalisen pääoman lisäksi mitattiin työyhteisön sosiaalista pääomaa käyttämällä samassa työyhteisössä työskentelevien muiden työntekijöiden keskimääräistä arviota sosiaalisesta pääomasta. Terveyttä mitattiin kysymyksellä koetusta terveydestä. Masennusta arvioitiin sekä kysymällä lääkärin toteamasta masennuksesta että masennuslääkeostoilla Kelan lääkerekistereistä. Analyyseihin otettiin mukaan vain ne kuntatyöntekijät, jotka olivat lähtötilanteissa terveitä eli kokivat terveytensä hyväksi tai heillä ei ollut aiempaa diagnosoitua tai lääkehoitoa vaatinutta masennusta. Tulosten analysointiin käytettiin monitasomallinnusta. Tulokset vakioitiin sosiodemografisten tekijöiden ja terveyskäyttäytymisen suhteen. Neljän vuoden seurannassa sekä jatkuvasti vähäinen että vähenevä yksilön sosiaalinen pääoma työssä lisäsi riskiä koetun terveyden heikkenemiseen niillä kuntatyöntekijöillä, jotka eivät vaihtaneet työpaikkaa seurannan aikana ja jotka seurannan alussa kokivat terveytensä hyväksi. Tulos ei selittynyt sosiodemografisilla tekijöillä tai terveyskäyttäytymisen eroilla. Tuloksen merkittävyyttä tuki havainto, että myös työtoverien arvioon perustuva sosiaalinen pääoma ennusti oman terveyden huononemista seuranta-aikana. Niillä työntekijöillä, jotka työskentelivät sellaisissa työyhteisöissä, joissa koko seurannan ajan oli vähiten sosiaalista pääomaa, oli lähes 1.3 -kertainen riski terveyden heikentymiseen. Vähäinen omaan arvioon perustuva sosiaalinen pääoma työssä ennusti myös masennuksen ilmaantuvuutta lähtötilanteessa ei-masentuneilla lähes neljän vuoden seurannassa. Matalaan sosiaaliseen pääomaan liittyi 20–50 % suurempi todennäköisyys sairastua masennukseen seurannan aikana niin itseraportoidun lääkärin totea-man masennuksen kuin masennuslääkeostojen perusteella. Tätä tulosta ei kuitenkaan pystytty toistamaan käyttämällä oman arvion sijasta työtoverien arviota työyhteisön sosiaalisesta pääomasta. Tutkimusta sosiaalisen pääoman vaikutusta masennuksen ilmaantumiseen jatkettiin selvittämällä miten sosiaalisen pääoman eri ulottuvuudet vaikuttivat masennuksen ilmaantumiseen. Tulosten mukaan sosiaalisen pääoman vertikaalinen komponentti (työntekijöiden ja esimiesten välinen luottamus, vastavuoroisuus ja jaetut arvot ja normit, jotka edesauttavat yhteistyötä) sekä horisontaalinen komponentti (työntekijöiden välisissä suhteissa yhteistyöstä, luottamuksesta ja vastavuoroisuudesta syntyvä sosiaalinen pääoma) vaikuttivat itsenäisesti masennusriskiin. Tutkimuksen perusteella korkea työyhteisön sosiaalinen pääoma saattaa vaikuttaa edullisesti työntekijöiden terveyteen. Jos näin on, olisi tärkeää edistää työyhteisöjen sosiaalista pääomaa ja kannustaa sellaiseen toimintaan, joka lisää suvaitsevaisuutta, luottamusta ja vastavuoroisuutta sekä työntekijöiden kesken että työntekijöiden ja esimiesten välillä.

The determinants of capital intensity in Japan and the U.S

We estimate the determinants of capital intensity in Japan and the US, characterized by striking different paths. We augment an otherwise standard Constant Elasticity of Substitution (CES) model with demand-side considerations, which we find especially relevant in the US. In this augmented setting, the elasticity of substitution between capital and labor is placed around 0.85 in Japan, and 0.30 in the US. We also find evidence of biased technical change, which is capital-saving in Japan but labor-saving in the US. These differences help us explain the diverse experience in the capital deepening process of these economies, and lead us to conclude that demand-side drivers may also be relevant to account for different growth experiences. A close look at the nature of technological change is also needed before designing one-size-fits-all industrial, economic growth, and/or labor market policies.

Engendering Group Support Based Foresight for Capital Intensive Manufacturing Industries - Case Paper and Steel Industry Scenarios by 2018

In recent times of global turmoil, the need for uncertainty management has become ever momentous. The need for enhanced foresight especially concerns capital-intensive industries, which need to commit their resources and assets with long-term planning horizons. Scenario planning has been acknowledged to have many virtues - and limitations - concerning the mapping of the future and illustrating the alternative development paths. The present study has been initiated to address both the need of improved foresight in two capital-intensive industries, i.e. the paper and steel industries and the imperfections in the current scenario practice. The research problem has been approached by engendering a problem-solving vehicle, which combines, e.g. elements of generic scenario process, face-to-face group support methods, deductive scenario reasoning and causal mapping into a fully integrated scenario process. The process, called the SAGES scenario framework, has been empirically tested by creating alternative futures for two capital-intensive industries, i.e. the paper and steel industries. Three scenarios for each industry have been engendered together with the identification of the key megatrends, the most important foreign investment determinants, key future drivers and leading indicators for the materialisation of the scenarios. The empirical results revealed a two-fold outlook for the paper industry, while the steel industry future was seen as much more positive. The research found support for utilising group support systems in scenario and strategic planning context with some limitations. Key perceived benefits include high time-efficiency, productivity and lower resource-intensiveness. Group support also seems to enhance participant satisfaction, encourage innovative thinking and provide the users with personalised qualitative scenarios.

Venture capital investment on SME

The thesis investigates if venture capital investments affect the development of SMEs positively. The thesis will also view the presence of venture capitalists affect on the capital structure of SMEs and other company determinants in the financial crisis. The theories effecting to SME investment has been presented to provide background information. The data consist of the financial statement data and the results a corporate questionnaire. The questionnaire consists of 63 questions and 860 corporate answered the questionnaire. The result shows that venture capitalist seems to have a negative effect on SMEs productivity. Also SMEs with a venture capitalist have more negative outlook for future in the financial crisis.

Venture capital investment on SME

This thesis studies venture capital investment on small and medium-sized enterprises (SMEs). The specific objective of the study is to test whether venture capitalists have a positive effect on SMEs. In addition effect of several other factors is studied in financial crisis. Used determinants are formulated based on three capital structure theories. The pecking order theory concerns favoring on financing source over another. The agency theory and the tradeoff theory concentrate on the search of optimal capital structure. The data of this study consist of financial statement data and results of corporate questionnaire. Regression analysis was used to find out the effects of several determinants. Regression models were formed based on the presented theories. SMEs with and without venture capitalists were considered separately. It was found that venture capitalists have a positive effect on SMEs. Although some results between SMEs with and without venture capitalists were mixed.

Characteristics of credit risk assessment methods of major Nordic banks in allocating capital when extending credits to large corporations

Credit risk assessment is an integral part of banking. Credit risk means that the return will not materialise in case the customer fails to fulfil its obligations. Thus a key component of banking is setting acceptance criteria for granting loans. Theoretical part of the study focuses on key components of credit assessment methods of Banks in the literature when extending credits to large corporations. Main component is Basel II Accord, which sets regulatory requirement for credit risk assessment methods of banks. Empirical part comprises, as primary source, analysis of major Nordic banks’ annual reports and risk management reports. As secondary source complimentary interviews were carried out with senior credit risk assessment personnel. The findings indicate that all major Nordic banks are using combination of quantitative and qualitative information in credit risk assessment model when extending credits to large corporations. The relative input of qualitative information depends on the selected approach to the credit rating, i.e. point-in-time or through-the-cycle.