The phenomenon of oligarchy in Russia and its impact on Russian transition

Nowadays any analysis of Russian economy is incomplete without taking into account the phenomenon of oligarchy. Russian oligarchs appeared after the fall of the Soviet Union and are represented by wealthy businessmen who control a huge part of natural resources enterprises and have a big political influence. Oligarchs’ shares in some natural resources industries reach even 70-80%. Their role in Russian economy is big without any doubts, however there has been very little economic analysis done. The aim of this work is to examine Russian oligarchy on micro and macro levels, its role in Russia’s transition and the possible positive and negative outcomes from this phenomenon. For this purpose the work presents two theoretical models. The first part of this thesis work examines the role of oligarchs on micro level, concentrating on the question whether the oligarchs can be more productive owners than other types of owners. To answer the question this part presents a model based on the article “Are oligarchs productive? Theory and evidence” by Y. Gorodnichenko and Y. Grygorenko. It is followed by empirical test based on the works of S. Guriev and A. Rachinsky. The model predicts oligarchs to invest more in the productivity of their enterprises and have higher returns on capital, therefore be more productive owners. According to the empirical test, oligarchs were found to outperform other types of owners, however it is not defined whether the productivity gains offset losses in tax revenue. The second part of the work concentrates on the role of oligarchy on macro level. More precisely, it examines the assumption that the depression after 1998 crises in Russia was caused by the oligarchs’ behavior. This part presents a theoretical model based on the article “A macroeconomic model of Russian transition: The role of oligarchic property rights” by S. Braguinsky and R. Myerson, where the special type of property rights is introduced. After the 1998 crises oligarchs started to invest all their resources abroad to protect themselves from political risks, which resulted in the long depression phase. The macroeconomic model shows, that better protection of property rights (smaller political risk) or/and higher outside investing could reduce the depression. Taking into account this result, the government policy can change the oligarchs’ behavior to be more beneficial for the Russian economy and make the transition faster.

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.

Corporate Funding on the European Debt Capital Market

The integrated European debt capital market has undoubtedly broadened the possibilities for companies to access funding from the public and challenged investors to cope with an ever increasing complexity of its market participants. Well into the Euro-era, it is clear that the unified market has created potential for all involved parties, where investment opportunities are able to meet a supply of funds from a broad geographical area now summoned under a single currency. Europe’s traditionally heavy dependency on bank lending as a source of debt capital has thus been easing as corporate residents are able to tap into a deep and liquid capital market to satisfy their funding needs. As national barriers eroded with the inauguration of the Euro and interest rates for the EMU-members converged towards over-all lower yields, a new source of debt capital emerged to the vast majority of corporate residents under the new currency and gave an alternative to the traditionally more maturity-restricted bank debt. With increased sophistication came also an improved knowledge and understanding of the market and its participants. Further, investors became more willing to bear credit risk, which opened the market for firms of ever lower creditworthiness. In the process, the market as a whole saw a change in the profile of issuers, as non-financial firms increasingly sought their funding directly from the bond market. This thesis consists of three separate empirical studies on how corporates fund themselves on the European debt capital markets. The analysis focuses on a firm’s access to and behaviour on the capital market, subsequent the decision to raise capital through the issuance of arm’s length debt on the bond market. The specific areas considered are contributing to our knowledge in the fields of corporate finance and financial markets by considering explicitly firms’ primary market activities within the new market area. The first essay explores how reputation of an issuer affects its debt issuance. Essay two examines the choice of interest rate exposure on newly issued debt and the third and final essay explores pricing anomalies on corporate debt issues.

Short-term Price Behavior and the Effect of Foreign Investors in Finnish Equity Markets (summary section only)

As globalization and capital free movement has increased, so has interest in the effects of that global money flow, especially during financial crises. The concern has been that large global money flows will affect the pricing of small local markets by causing, in particular, overreaction. The purpose of this thesis is to contribute to the body of work concerning short-term under- and overreaction and the short-term effects of foreign investment flow in the small Finnish equity markets. This thesis also compares foreign execution return to domestic execution return. This study’s results indicate that short-term under- and overreaction occurs in domestic-buy portfolios (domestic net buying) rather than in foreign-buy portfolios. This under- and overreaction, however, is not economically meaningful after controlling for the bid-ask bounce effect. Based on this finding, one can conclude that foreign investors do not have a destabilizing effect in the short-term in the Finnish markets. Foreign activity affects short-term returns. When foreign investors are net buyers (sellers) there are positive (negative) market adjusted returns. Literature related to nationality and institutional effect leads us to expect these kind of results. These foreign flows are persistent at a 5 % to 21 % level and the persistence of foreign buy flow is higher than the foreign sell flow. Foreign daily trading execution is worse than domestic execution. Literature which quantifies foreign investors as liquidity demanders and literature related to front-running leads us to expect poorer foreign execution than domestic execution.

Cobreaking of Stock Prices and Contagion

Financial crises have shown that dramatic movements in one financial market can have a powerful impact on other markets. The paper proposes to use cobreaking to model comovements between financial markets during crises and to test for conta-gion. It finds evidence of cobreaking between stock returns in developed markets. Finding cobreaking has implications for the diversification of international investments. For emerging mar-ket stock returns the evidence of cobreaking is mainly due to the non-financial event of the 9/11 terrorist attacks in 2001. Fi-nancial crises originating in one emerging market do not spread to other markets, i.e., no contagion.

Theorizing the Nature of Reflection

For the past decades reflection has been the buzzword of adult and higher education. Reflection is facilitated in many practices and there is abundant research on the issue. Despite the popularity of the concept, the reasons why bringing about reflection in educational practices is difficult remain unclear. The prevailing theories inform of the process in its ideal form. However, to a great extent, they fail to offer conceptual tools for understanding and working with the actualities of reflection. The aim of the doctoral thesis was to explore the challenges and prerequisites of reflection in order to theorize the nature of reflection. By the term reflection it is here referred to becoming aware of and questioning the assumptions that orient our thinking, feelings and actions. The doctoral thesis consists of five studies that approach these questions from different viewpoints and within different contexts. The methods involve both a philosophical and an empirical approach. This multifaceted approach embodies the aim of both gaining a more thorough grasp of the phenomenon and to develop the methodology of researching reflection. The theory building is based on conceptual analysis and rational reconstruction (see Davia 1998; Habermas 1979; Rorty1984) of Mezirow s (1981; 1991; 2000; 2009) theory of transformative learning. In order to explore the aspects which, based on the analysis, appeared insufficiently considered within Mezirow s theory, Damasio s (1994; 1999; 2003; 2010) theory on emotions and consciousness as well as Clausewitz s (1985) view on friction are used as complementary theories. Empirical analyses are used in dialogue with the theoretical, in order to challenge and refine the emerging theorization. Reflection is examined in three different contexts; regarding university teachers pedagogical growth, involuntarily childless women recovering from a life-event crisis, and soldiers preparing to act in chaotic situations of the battlefield as well as recovering from it. The choice of these contexts is based on Mezirow s notion of disorienting dilemma as a trigger for reflection. This notion indicates that reflection may more naturally emerge in association to life-event crises or other cumulative sets of instances, which bring our worldview and beliefs under question. Nevertheless, reflection is often being promoted in educational contexts in which the trigger conditions may not readily prevail. These contextual issues as well as the differences between the facilitated and non-facilitated contexts have not, however, been considered in detail within the research on reflection (or transformative learning). The doctoral thesis offers a new perspective into reflection which, as a further development on Mezirow s transformative learning theory, theorizes the nature of reflection. The developed theory explicates the prerequisites and challenges to reflection. The theory suggests that the challenges of reflection are fundamentally connected to the way the biological life-support system affects our thinking through emotions. While depicting the mechanisms that function as a counterforce to reflection, the developed theory also opens a perspective for considering possibilities for carrying out reflection, and suggests ways to locate and deal with the assumptions to be reflected on. The basic dynamic of the challenges to reflection was explicated by conceptually bridging the gap between Mezirow s and Damasio s theories, through exploring the connections between the meaning perspective and the biological functions of emotions. The concepts of comfort zone and edge-emotions were formed so as to depict the emotional orientation of our thinking, as part of the explanation of the nature of reflection.

The phenomenon of oligarchy in Russia and its impact on Russian transition

Nowadays any analysis of Russian economy is incomplete without taking into account the phenomenon of oligarchy. Russian oligarchs appeared after the fall of the Soviet Union and are represented by wealthy businessmen who control a huge part of natural resources enterprises and have a big political influence. Oligarchs’ shares in some natural resources industries reach even 70-80%. Their role in Russian economy is big without any doubts, however there has been very little economic analysis done. The aim of this work is to examine Russian oligarchy on micro and macro levels, its role in Russia’s transition and the possible positive and negative outcomes from this phenomenon. For this purpose the work presents two theoretical models. The first part of this thesis work examines the role of oligarchs on micro level, concentrating on the question whether the oligarchs can be more productive owners than other types of owners. To answer the question this part presents a model based on the article “Are oligarchs productive? Theory and evidence” by Y. Gorodnichenko and Y. Grygorenko. It is followed by empirical test based on the works of S. Guriev and A. Rachinsky. The model predicts oligarchs to invest more in the productivity of their enterprises and have higher returns on capital, therefore be more productive owners. According to the empirical test, oligarchs were found to outperform other types of owners, however it is not defined whether the productivity gains offset losses in tax revenue. The second part of the work concentrates on the role of oligarchy on macro level. More precisely, it examines the assumption that the depression after 1998 crises in Russia was caused by the oligarchs’ behavior. This part presents a theoretical model based on the article “A macroeconomic model of Russian transition: The role of oligarchic property rights” by S. Braguinsky and R. Myerson, where the special type of property rights is introduced. After the 1998 crises oligarchs started to invest all their resources abroad to protect themselves from political risks, which resulted in the long depression phase. The macroeconomic model shows, that better protection of property rights (smaller political risk) or/and higher outside investing could reduce the depression. Taking into account this result, the government policy can change the oligarchs’ behavior to be more beneficial for the Russian economy and make the transition faster.

Remark on factorials that are products of factorials

In a paper published in 1993, Erdos proved that if n! = a! b!, where 1 < a a parts per thousand currency sign b, then the difference between n and b does not exceed 5 log log n for large enough n. In the present paper, we improve this upper bound to ((1 + epsilon)/ log 2) log log n and generalize it to the equation a (1)!a (2)! ... a (k) ! = n!. In a recent paper, F. Luca proved that n - b = 1 for large enough n provided that the ABC-hypothesis holds.

Rauhan atomi, sodan koodi : Suomalaisen atomivoimaratkaisun teknopolitiikka 1955-1970

This dissertation investigates the atomic power solution in Finland between 1955 - 1970. During these years a national arrangement for atomic energy technology evolved. The foundations of the Finnish atomic energy policy; the creation of basic legislation and the first governmental bodies, were laid between 1955 - 1965. In the late 1960's, the necessary technological and political decisions were made in order to purchase the first commercial nuclear reactor. A historical narration of this process is seen in the international context of "atoms for peace" policies and Cold War history in general. The geopolitical position of Finland made it necessary to become involved in the balanced participation in international scientific-technical exchange and assistive nuclear programs. The Paris Peace Treaty of 1947 categorically denied Finland acquisition of nuclear weapons. Accordingly, from the "Geneva year" of 1955, the emphasis was placed on peaceful purposes for atomic energy as well as on the education of national professionals in Finland. An initiative for the governmental atomic energy commission came from academia but the ultimate motive behind it was an anticipated structural change in the supply of national energy. Economically exploitable hydro power resources were expected to be built within ten years and atomic power was seen as a promising and complementing new energy technology. While importing fuels like coal was out of the question, because of scarce foreign currency, domestic uranium mineral deposits were considered as a potential source of nuclear fuel. Nevertheless, even then nuclear energy was regarded as just one of the possible future energy options. In the mid-1960 s a bandwagon effect of light water reactor orders was witnessed in the United States and soon elsewhere in the world. In Finland, two separate invitations for bids for nuclear reactors were initiated. This study explores at length both their preceding grounds and later phases. An explanation is given that the parallel, independent and nearly identical tenders reflected a post-war ideological rivalry between the state-owned utility Imatran Voima and private energy utilities. A private sector nuclear power association Voimayhdistys Ydin represented energy intensive paper and pulp industries and wanted to have free choice instead of being associated themselves with "the state monopoly" in energy pricing. As a background to this, a decisive change had started to happen within Finnish energy policy: private and municipal big thermal power plants became incorporated into the national hydro power production system. A characteristic phenomenon in the later history is the Soviet Union s effort to bid for the tender of Imatran Voima. A nuclear superpower was willing to take part in competition but not on a turnkey basis as Imatran Voima had presumed. As a result of many political turns and four years of negotiations the first Finnish commercial light water reactor was ordered from the East. Soon after this the private nuclear power group ordered its reactors from Sweden. This work interprets this as a reasonable geopolitical balance in choosing politically sensitive technology. Conceptually, social and political dimensions of new technology are emphasised. Negotiations on the Finnish atomic energy program are viewed as a cooperation and a struggle, where state-oriented and private-oriented regimes pose their own macro level views and goals (technopolitical imaginaries) and defend and advance their plans and practical modes of action (schemata). Here, not only technologists but even political actors are seen to contribute to technopolitical realisations.

Boxicity of Leaf Powers

The boxicity of a graph G, denoted as boxi(G), is defined as the minimum integer t such that G is an intersection graph of axis-parallel t-dimensional boxes. A graph G is a k-leaf power if there exists a tree T such that the leaves of the tree correspond to the vertices of G and two vertices in G are adjacent if and only if their corresponding leaves in T are at a distance of at most k. Leaf powers are used in the construction of phylogenetic trees in evolutionary biology and have been studied in many recent papers. We show that for a k-leaf power G, boxi(G) a parts per thousand currency sign k-1. We also show the tightness of this bound by constructing a k-leaf power with boxicity equal to k-1. This result implies that there exist strongly chordal graphs with arbitrarily high boxicity which is somewhat counterintuitive.

Det grekiska dramat. En Studie av euroländeras agerande i Greklandskrisen.

Jag granskar i min avhandling pro gradu den ekonomiska krisen i Grekland som kulminerade under vären 2010 när Grekland vände sig tili de övriga medlemsländerna i Ekonomiska och monetära Unionen (EMU) med en förfrägan om ekonomisk hjälp i formav län. Syftet med avhandlingen är att undersöka hur de övriga EMU-medlemmarna fattade sitt beslut om att ekonomiskt stöda Grekland efter att landets kreditvärdighet sänkts av de internationella kreditvärderingsinstituten. Jag granskar Greklandskrisen och dess utveckling, de lösningar som man gick in för inom ramen för valutaunionen, hur besluten om stödpaketet fattades och vilka faktorer som päverkade besluten. Jag tar avstamp i Optimum Currency Area-teorin (OCA-teorin) och teorier om europeisk ekonomisk integration. Dessutom för jag en diskussion kring solidariteten mellan EUländerna, som ocksä använts som argument för stödpaketet tili Grekland. Jag klassificerar euroländerna utgäende för hur det nationella beslutet om Greklandspaketet fattats och gör därefter en agglomerativ klusteranalys, med ambitionen att förklara vilka faktorer som päverkat besluten. Syftet med klusteranalysen är att klargöra huruvida politiska faktorer, som härrör sig tili regeringen och dess sammansättning, eller ekonomiska faktorer, som bclyser statsfinansernas tillständ, bäst förklarar hur ett land fattat sitt beslut. Resultatet visar att de politiska variablerna har päverkat ländernas beslut mer an de ekonomiska, men förklaringsgraden är relativt lag i bägge fallen. Jag för vidare en diskussion om resultatet ur ett OCA-perspektiv, kriterierna för ett optimalt valutaomräde samt EMU:s utveckling i dito riktning. Jag avslutar avhandlingen med en diskussion kring EMU:s framtid.

Role of TGF-beta beta and BMP7 in the pathogenesis of oral submucous fibrosis

To understand the molecular pathogenesis of oral submucous fibrosis (OSF), which is a chronic inflammatory disease, gene expression profiling was performed in 10 OSF tissues against 8 pooled normal tissues using oligonucleotide arrays. Microarray results revealed differential expression of 5288 genes (P < a parts per thousand currency sign 0.05 and fold change >= a parts per thousand yen 1.5). Among these, 2884 are upregulated and 2404 are downregulated. Validation employing quantitative real-time PCR and immunohistochemistry confirmed upregulation of transforming growth factor-beta beta 1 (TGF-beta beta 1), TGFBIp, THBS1, SPP1, and TIG1 and downregulation of bone morphogenic protein 7 (BMP7) in OSF tissues. Furthermore, activation of TGF-beta beta pathway was evident in OSF as demonstrated by pSMAD2 strong immunoreactivity. Treatment of keratinocytes and oral fibroblasts by TGF-beta beta confirmed the regulation of few genes identified in microarray including upregulation of connective tissue growth factor, TGM2, THBS1, and downregulation of BMP7, which is a known negative modulator of fibrosis. Taken together, these data suggest activation of TGF-beta beta signaling and suppression of BMP7 expression in the manifestation of OSF.

Efficiently Approximating Query Optimizer Plan Diagrams

Given a parametrized n-dimensional SQL query template and a choice of query optimizer, a plan diagram is a color-coded pictorial enumeration of the execution plan choices of the optimizer over the query parameter space. These diagrams have proved to be a powerful metaphor for the analysis and redesign of modern optimizers, and are gaining currency in diverse industrial and academic institutions. However, their utility is adversely impacted by the impractically large computational overheads incurred when standard brute-force exhaustive approaches are used for producing fine-grained diagrams on high-dimensional query templates. In this paper, we investigate strategies for efficiently producing close approximations to complex plan diagrams. Our techniques are customized to the features available in the optimizer's API, ranging from the generic optimizers that provide only the optimal plan for a query, to those that also support costing of sub-optimal plans and enumerating rank-ordered lists of plans. The techniques collectively feature both random and grid sampling, as well as inference techniques based on nearest-neighbor classifiers, parametric query optimization and plan cost monotonicity. Extensive experimentation with a representative set of TPC-H and TPC-DS-based query templates on industrial-strength optimizers indicates that our techniques are capable of delivering 90% accurate diagrams while incurring less than 15% of the computational overheads of the exhaustive approach. In fact, for full-featured optimizers, we can guarantee zero error with less than 10% overheads. These approximation techniques have been implemented in the publicly available Picasso optimizer visualization tool.

Cubicity and Bandwidth

A unit cube in (or a k-cube in short) is defined as the Cartesian product R (1) x R (2) x ... x R (k) where R (i) (for 1 a parts per thousand currency sign i a parts per thousand currency sign k) is a closed interval of the form a (i) , a (i) + 1] on the real line. A k-cube representation of a graph G is a mapping of the vertices of G to k-cubes such that two vertices in G are adjacent if and only if their corresponding k-cubes have a non-empty intersection. The cubicity of G is the minimum k such that G has a k-cube representation. From a geometric embedding point of view, a k-cube representation of G = (V, E) yields an embedding such that for any two vertices u and v, ||f(u) - f(v)||(a) a parts per thousand currency sign 1 if and only if . We first present a randomized algorithm that constructs the cube representation of any graph on n vertices with maximum degree Delta in O(Delta ln n) dimensions. This algorithm is then derandomized to obtain a polynomial time deterministic algorithm that also produces the cube representation of the input graph in the same number of dimensions. The bandwidth ordering of the graph is studied next and it is shown that our algorithm can be improved to produce a cube representation of the input graph G in O(Delta ln b) dimensions, where b is the bandwidth of G, given a bandwidth ordering of G. Note that b a parts per thousand currency sign n and b is much smaller than n for many well-known graph classes. Another upper bound of b + 1 on the cubicity of any graph with bandwidth b is also shown. Together, these results imply that for any graph G with maximum degree Delta and bandwidth b, the cubicity is O(min{b, Delta ln b}). The upper bound of b + 1 is used to derive upper bounds for the cubicity of circular-arc graphs, cocomparability graphs and AT-free graphs in terms of the maximum degree Delta.

Nonlinear gravity-wave interactions in stratified turbulence

To investigate the dynamics of gravity waves in stratified Boussinesq flows, a model is derived that consists of all three-gravity-wave-mode interactions (the GGG model), excluding interactions involving the vortical mode. The GGG model is a natural extension of weak turbulence theory that accounts for exact three-gravity-wave resonances. The model is examined numerically by means of random, large-scale, high-frequency forcing. An immediate observation is a robust growth of the so-called vertically sheared horizontal flow (VSHF). In addition, there is a forward transfer of energy and equilibration of the nonzero-frequency (sometimes called ``fast'') gravity-wave modes. These results show that gravity-wave-mode interactions by themselves are capable of systematic interscale energy transfer in a stratified fluid. Comparing numerical simulations of the GGG model and the full Boussinesq system, for the range of Froude numbers (Fr) considered (0.05 a parts per thousand currency sign Fr a parts per thousand currency sign 1), in both systems the VSHF is hardest to resolve. When adequately resolved, VSHF growth is more vigorous in the GGG model. Furthermore, a VSHF is observed to form in milder stratification scenarios in the GGG model than the full Boussinesq system. Finally, fully three-dimensional nonzero-frequency gravity-wave modes equilibrate in both systems and their scaling with vertical wavenumber follows similar power-laws. The slopes of the power-laws obtained depend on Fr and approach -2 (from above) at Fr = 0.05, which is the strongest stratification that can be properly resolved with our computational resources.