Kilpailuetu tietokonekeskuspalveluiden ulkoistuksessa

Tutkimuksen tavoitteena on selvittää millä keinoilla voidaan kehittää tutkittavan yrityksen ulkoistettujen globaalien tietokonekeskuspalveluiden kilpailuetua. Lisäksi tavoitteena on selvittää kriittisimmät kilpailuetua tuottavat asiat, jotka tulisi ottaa huomioon sopimusneuvotteluissa. Ongelmaa lähestyttiin strategian, ulkoistusteorioiden, sopimuksen, hinnoittelumallien, yrityskulttuurin, innovaatioiden, luottamuksen ja yhteistyöverkostojen kautta. ICT -ulkoistuksen nykytilaa ja kehittämistarvetta tutkittiin laadullisella tutkimuksella teemahaastattelujen avulla. Tutkimuksessa haastateltiin tutkittavan yrityksen lisäksi kaksi globaalia ulkoistuskumppania. Tutkimuksen tuloksena keskeiseksi tekijöiksi nousi yhteisen strategian ja tavoitteiden määrittely ja jalkauttaminen, ydinkyvykkyyksien hallinta, sidosryhmien hallinta, yrityskulttuurien huomioiminen, toimittajaosaamisen hallinta, ja kustannuksien pienentäminen. Sopimuksen tekovaiheessa tulisi jo määritellä sopimuksesta irrottautumisen strategia. Hinnoittelumallin päätöksentekoa tulisi asiakkaan johtaa sekä neuvotella tasapuoliset ja motivoivat kannustimet.

Teknologiateollisuuden sopimusvalmistajayrityksen kustannuslaskennan kehittäminen

Työn päätavoitteena oli kohdeyrityksen kustannuslaskennan kehittäminen, jota varten selvitettiin toimintojen todelliset kustannukset sekä rakennettiin uusi taulukkolaskentaan perustuva hinnoittelumalli. Todellisten kustannukset selvitettiin toimintolaskennan avulla. Yrityksen aiempi kustannuslaskenta perustui perinteiseen lisäyslaskentaan. Työ jakaantui kahteen vaiheeseen: yrityksen kustannuslaskennan nykytilaselvitykseen ja toimintolaskennan toteuttamiseen. Ensimmäisen vaiheen teoriaosuudessa esiteltiin perinteisen kustannuslaskennan ja toimintolaskennan menetelmät sekä vertailtiin niitä keskenään. Empiriaosuudessa käsiteltiin yrityksen kustannusrakenne, tuotekustannuslaskenta, hinnoitteluprosessi ja eri hinnoittelukohteet. Nykytilaselvityksen perusteella laadittiin lista nykyisen kustannuslaskennan ja hinnoittelun kehitettävistä asioista. Kehittäminen päätettiin toteuttaa toimintolaskennan avulla. Toisessa vaiheessa esiteltiin toimintolaskennan toteuttamiseen ja käyttöönottoon liittyvä teoria. Tämän jälkeen suoritettiin toimintokustannusten laskeminen ja uuden hinnoittelumallin rakentaminen. Hinnoittelumallissa haettiin nopeutta uudella materiaalinlaskentatavalla. Työn tuloksina havaittiin, että toteutuneet kustannukset erosivat monen toiminnon kohdalla lisäyslaskennalla lasketuista kustannuksista ja tämä oli vääristänyt tuotteiden hinnoittelua. Toimintolaskennan käyttöönotolla yrityksen kustannuslaskenta ja tuotehinnoittelu saatettiin vastaamaan todellisia kustannuksia. Hinnoittelun nopeutumisella saavutettiin merkittäviä kustannussäästöjä.

Practical Framework for Monitoring the Performance of Agile IT Projects in an Output-Based Outsourcing Context

Over the past decade, organizations worldwide have begun to widely adopt agile software development practices, which offer greater flexibility to frequently changing business requirements, better cost effectiveness due to minimization of waste, faster time-to-market, and closer collaboration between business and IT. At the same time, IT services are continuing to be increasingly outsourced to third parties providing the organizations with the ability to focus on their core capabilities as well as to take advantage of better demand scalability, access to specialized skills, and cost benefits. An output-based pricing model, where the customers pay directly for the functionality that was delivered rather than the effort spent, is quickly becoming a new trend in IT outsourcing allowing to transfer the risk away from the customer while at the same time offering much better incentives for the supplier to optimize processes and improve efficiency, and consequently producing a true win-win outcome. Despite the widespread adoption of both agile practices and output-based outsourcing, there is little formal research available on how the two can be effectively combined in practice. Moreover, little practical guidance exists on how companies can measure the performance of their agile projects, which are being delivered in an output-based outsourced environment. This research attempted to shed light on this issue by developing a practical project monitoring framework which may be readily applied by organizations to monitor the performance of agile projects in an output-based outsourcing context, thus taking advantage of the combined benefits of such an arrangement Modified from action research approach, this research was divided into two cycles, each consisting of the Identification, Analysis, Verification, and Conclusion phases. During Cycle 1, a list of six Key Performance Indicators (KPIs) was proposed and accepted by the professionals in the studied multinational organization, which formed the core of the proposed framework and answered the first research sub-question of what needs to be measured. In Cycle 2, a more in-depth analysis was provided for each of the suggested Key Performance Indicators including the techniques for capturing, calculating, and evaluating the information provided by each KPI. In the course of Cycle 2, the second research sub-question was answered, clarifying how the data for each KPI needed to be measured, interpreted, and acted upon. Consequently, after two incremental research cycles, the primary research question was answered describing the practical framework that may be used for monitoring the performance of agile IT projects delivered in an output-based outsourcing context. This framework was evaluated by the professionals within the context of the studied organization and received positive feedback across all four evaluation criteria set forth in this research, including the low overhead of data collection, high value of provided information, ease of understandability of the metric dashboard, and high generalizability of the proposed framework.

Education export as a form of knowledge transfer : The potential of Finnish education export in Chile

Knowledge transfer is a complex process. Knowledge transfer in the form of exporting education products from one system of education to another is particularly complicated, because each system has been developed in a particular context to meet the requirements seen as relevant at each time. National innovation systems are often seen to form an essential framework within which the development of a country, its economy and level of knowledge are considered and promoted. These systems are orientated towards the future, and as such they also provide a framework for the knowledge transfer related to the development of education. In the best of circumstances they are able to facilitate and boost this transfer both from the viewpoint of the provider and the recipient. The leading thought and the idea of the study is that education export is a form of knowledge transfer, which is illustrated by the existing models included. The purpose of this study is to explore, analyze and describe the factors and phenomena related to education export, and more specifically, those related to the experiences and potential of Finnish education export to Chile. For better understanding, of the multiplicity of the issue involved, the current status of education export between Finland and Chile and he existing efforts within the Finnish innovation network will be outlined as well as new forms of co-operation between Finland and Chile in educational matters explored. Several countries have started to commercialize their education system in order to establish themselves as emerging education exporters. Moreover, the demand for education reform is accurate in many developing countries. This offers a good match between Finland and Chile to be the example countries of the research. The main research findings suggest that there are several business areas in education export. These include degrees in education, training services and education technologies for example The factors that influence education export can be divided into four groups, including academic, cultural, political and economic aspects. Challenges to overcome include the lack of product or services to be sold, lack of market and cultural knowledge of the buyer country, financing and lack of suitable pricing model. National innovation systems could be seen as enabling entities for successful education export. The extensive networks that national innovation systems aim to form, could operate as a basis for joining the forces in selling knowledge as well as receiving knowledge in a constructive way.

Risk-return trade-off and autocorrelation

A trade-off between return and risk plays a central role in financial economics. The intertemporal capital asset pricing model (ICAPM) proposed by Merton (1973) provides a neoclassical theory for expected returns on risky assets. The model assumes that risk-averse investors (seeking to maximize their expected utility of lifetime consumption) demand compensation for bearing systematic market risk and the risk of unfavorable shifts in the investment opportunity set. Although the ICAPM postulates a positive relation between the conditional expected market return and its conditional variance, the empirical evidence on the sign of the risk-return trade-off is conflicting. In contrast, autocorrelation in stock returns is one of the most consistent and robust findings in empirical finance. While autocorrelation is often interpreted as a violation of market efficiency, it can also reflect factors such as market microstructure or time-varying risk premia. This doctoral thesis investigates a relation between the mixed risk-return trade-off results and autocorrelation in stock returns. The results suggest that, in the case of the US stock market, the relative contribution of the risk-return trade-off and autocorrelation in explaining the aggregate return fluctuates with volatility. This effect is then shown to be even more pronounced in the case of emerging stock markets. During high-volatility periods, expected returns can be described using rational (intertemporal) investors acting to maximize their expected utility. During lowvolatility periods, market-wide persistence in returns increases, leading to a failure of traditional equilibrium-model descriptions for expected returns. Consistent with this finding, traditional models yield conflicting evidence concerning the sign of the risk-return trade-off. The changing relevance of the risk-return trade-off and autocorrelation can be explained by heterogeneous agents or, more generally, by the inadequacy of the neoclassical view on asset pricing with unboundedly rational investors and perfect market efficiency. In the latter case, the empirical results imply that the neoclassical view is valid only under certain market conditions. This offers an economic explanation as to why it has been so difficult to detect a positive tradeoff between the conditional mean and variance of the aggregate stock return. The results highlight the importance, especially in the case of emerging stock markets, of noting both the risk-return trade-off and autocorrelation in applications that require estimates for expected returns.

Kaukolämmön hinnoittelumallien optimointi ja kehittäminen muuttuvassa toimintaympäristössä

Kaukolämpöliiketoiminnan kehittämistarve korostuu jatkuvasti alan rakennemuutosten ja markkinoiden muutoksien seurauksena. Turku Energian tavoitteena on uudistaa ja kehittää kaukolämmön hinnoitteluaan vastaamaan energian tuotannon, jakelun, loppukäytön ja muihin alan muutoksiin. Tässä opinnäytetyössä tutkitaan kaukolämmön hinnoittelun optimointi ja kehittämistä nykyisessä sekä tulevaisuuden markkina- ja tuotantorakenteessa. Nykyisen hinnoittelumallin lisäksi tutkitaan vaihtoehtoisia tapoja hinnoitella myytävä kaukolämpöenergia, kuten vuodenaikojen mukaan määriteltävä muuttuva energianhinta. Työn kirjallisuusosassa esitellään kaukolämmön tuotanto, siirto ja jakelu sekä liiketoiminta Suomessa ja Turun seudulla. Tutkittavat hinnoittelumallit perustuvat todellisiin ja arvioituihin liiketoiminnan kustannuksiin, sekä esitettyihin laskentaperiaatteisiin. Turku Energian nykyistä perusmaksun hintatasoa tulee korottaa, jotta se vastaa lämmönhankinnan kiinteitä kustannuksia tarkemmin ja minimoi liiketoiminnan markkinariskiä. Nykyisen hinnoittelun verokomponentin kehittämisellä lisätään hinnoittelun läpinäkyvyyttä. Kausihinnoittelun avulla energianhinta noudattaa tuotannon kustannuksia vuoden aikana ja ohjaa asiakkaiden lämmönkulutusta nykyistä tarkemmin. Uusiutuvilla energianlähteillä tuotettua kaukolämpöä voidaan myydä erillisillä tuotteilla, joiden avulla liiketoiminnalle saadaan lisäarvoa.

Luottamus seudullisen palvelukeskuksen hinnoittelun rakentumisen keinona

Tämän tutkimuksen tavoitteena oli selvittää millainen hinnoittelumalli koetaan asiakkaiden mielestä tasapuolisimmaksi ja millainen rooli luottamuksella on seudullisen perustietotekniikkapalvelukeskuksen ja sen asiakasorganisaatioiden sekä myös liikelaitoksen toimintaa ohjaavan asiakasyhteistyöryhmän jäsenten kesken palvelujen tuotteistamiseen ja hinnoitteluun liittyen. Teoreettisessa osuudessa selvitetään mitä tuotteistamisella tarkoitetaan ja miten tuotteistaminen liittyy hinnoitteluun, mitä hinnoitteluvaihtoehtoja julkishallinnon organisaatiossa voidaan käyttää, mitä luottamuksella käsitetään ja mitä seudullisen yhteistyön eri toimintamuotoja tässä palvelukeskuksessa on käytetty. Empiirisessä osuudessa on kuvattu ICT Kymiin kohdistuvaa tutkimusta ja sen tuloksia. Työ toteutettiin keväällä 2014 toimintatutkimuksena, jossa ICT Kymi -kunnallisen liikelaitoksen asiakasyhteistyöryhmä osallistui uuden hinnoittelumallin suunnitteluun. Aineistoa kerättiin haastatteluin sekä ryhmän työpajatapaamisissa ja kokouksissa. Tutkimuksen tuloksena havaittiin, että luottamus mahdollistaa tuotteistuksen tasosta poikkeavan, yksinkertaisemman hinnoittelumallin käytön.

Siirtohinnoittelun kehittäminen etäluettavilta mittareilta saatavan datan avulla sähkönjakeluyhtiö Mäntsälän Sähkö Oy:lle

Sähkönsiirtomaksuilla katetaan luonnollisena alueellisena monopolina toimivan paikallisen sähkönjakeluyhtiön toiminta. Koska sähköverkkoyhtiöt toimivat monopoliasemassa, niiden toimintaa valvoo Energiavirasto. Energiavirasto valvoo pääasiassa verkkoyhtiöiden liikevaihtoa ja toiminnan tehokkuutta. Verkkoyhtiöiden toimintaa säätää Suomessa sähkömarkkinalaki. Verkkoyhtiöiden kustannusrakenne on hyvin sidottu verkoston kustannuksiin. Koska sähköverkoston kustannukset ovat pitkän käyttöiän ja suurien alkuinvestointien vuoksi vuosittain kiinteät ja merkittävän suuret, olisi verkkoyhtiön kannalta tärkeää, että vuosittaiset tulot eivät suuresti vaihtelisi. Nykyisellä hinnoittelumallilla kuitenkin verkkoyhtiöiden tulot jäävät hyvin riippuvaisiksi talven kylmyydestä. Nykyisin Suomessa yleisesti käytettävässä siirtohinnoittelun hinnoittelumallissa ei huomioida myöskään sitä, että verkkoyhtiön kustannukset ovat enemmän riippuvaisia verkossa siirretyistä tehoista kuin energioista. Siirtohinnoittelun kannalta on tapahtunut ja on tapahtumassa merkittäviä muutoksia. Etäluettavien sähkönkulutusmittarien käyttöönoton myötä asiakkaiden kulutuksesta saadaan huomattavasti entistä enemmän tietoa, mikä auttaa kustannusvastaavien hintojen määrittämisessä. Samaan aikaan asiakkaiden sähkön käyttö voi muuttua huomattavasti varsinkin sähköautojen ja lämpöpumppujen yleistymisen myötä. Tämän työn tarkoituksena on luoda Mäntsälän Sähkö Oy:lle sähkönsiirtohinnoittelun kustannuksia vastaavien hintojen määrittämiseksi laskentasovellus sekä selvittää tulevaisuuden siirtohinnoittelun toteuttamismahdollisuuksia. Lyhyen aikavälin suunnittelussa keskitytään kustannusvastaavien hintojen määrittämiseen keskihintaperiaatteen avulla ja pidemmän aikavälin suunnittelussa asiakkaiden huipputehoihin perustuvan hinnoittelun toteuttamisen vaikutuksiin sekä verkkoyhtiön että asiakkaan näkökulmasta.

Hoitokuluanalyysi Suomen yksityisen sektorin työeläkejärjestelmästä

Tämän pro gradu -tutkielman tavoitteena on tutkia Suomen työeläkevakuutusyhtiöiden työeläkevakuutusmaksun hoitokustannusosalla katettavia liikekuluja ja muodostaa analyysi Suomen työeläkevakuutusjärjestelmän liikekulujen kehittymisestä ja tehokkuuden tasosta. Tehokkuusnäkökulman lisäksi tarkastellaan työeläkejärjestelmän kilpailuolosuhteita. Tutkimusta motivoi työeläkealalle ajankohtainen asia, joka liittyy yhtiökohtaisen hinnoittelumallin mahdolliseen käyttöönottoon, jota parhaillaan suunnitellaan työeläkealan tehokkuuden ja kilpailullisuuden lisäämiseksi. Yhtiökohtaisessa hinnoittelumallissa työeläkeyhtiö voisi itsenäisesti vaikuttaa työeläkevakuutuksen hintaan hoitokustannusosan kautta, joka määräytyisi pitkälti sen mukaan kuinka tehokkaasti yhtiö pystyy toimintansa järjestämään. Empiirinen tutkimus on toteutettu kvalitatiivisena tapaustutkimuksena, jossa kuitenkin empiirinen analyysi perustuu kvantitatiiviseen aineistoon ja aineistoa on käsitelty kvantitatiivisen tutkimuksen menetelmin. Pääasiallisina tutkimusotteina on käytetty taulukointia ja erinäisten muuttujien välistä korrelaatiota. Tuloksien suhteen on käytetty aineistolähtöistä induktiivista päättelyä. Tutkimuksessa on tutkittu seitsemän yksityisen sektorin työeläkeyhtiön liikekuluja vuosilta 2006–2013. Tutkimustuloksien mukaan järjestelmätasolla tarkasteltuna työeläkeyhtiöiden toiminta on tehokasta, joskin yksittäisten yhtiöiden välillä on suuriakin tehokkuuseroja. Vakuutusten ja korvaustoiminnan hoito ovat suurimmat kustannusten aiheuttajat. Työeläkemarkkinat ovat hyvin keskittyneet ja muistuttavat enemmänkin oligopolisia markkinoita kuin täydellisen kilpailun markkinoita.

The Performance of European Small Cap Equity Funds

The thesis examines the risk-adjusted performance of European small cap equity funds between 2008 and 2013. The performance is measured using several measures including Sharpe ratio, Treynor ratio, Modigliani measure, Jensen alpha, 3-factor alpha and 4-factor alpha. The thesis also addresses the issue of persistence in mutual fund performance. Thirdly, the relationship between the activity of fund managers and fund performance is investigated. The managerial activity is measured using tracking error and R-squared obtained from a 4-factor asset pricing model. The issues are investigated using Spearman rank correlation test, cross-sectional regression analysis and ranked portfolio tests. Monthly return data was provided by Morningstar and consists of 88 mutual funds. Results show that small cap funds earn back a significant amount of their expenses, but on average loose to their benchmark index. The evidence of performance persistence over 12-month time period is weak. Managerial activity is shown to positively contribute to fund performance

Logistics Cost Optimization of Road Freight Shipments in a Consumer Goods Company

In the industry of the case company, transportation and warehousing costs account for more than 10% of the total cost which is more than on average. A Finnish company has an understanding that by sending larger shipments in parcels, they could save tens of thousands of euros annually in freight costs in Finland’s domestic shipments. To achieve these savings and optimize total logistics cost, company’s interest is to find out which is the cost efficient way of shipping road shipments of certain volumes; in parcel boxes or on pallets, and what should be the split volume determining the shipment type. Distribution center (DC) costs affect this decision and therefore they need to be also evaluated to determine the total logistics cost savings. Main results were achieved by executing activity-based costing-calculations including DC and road freight costs to determine the ideal split volume with which the total logistics cost is optimal. Calculations were done for Finland’s DC, separately for two main road freight destinations, Finland and Sweden, which cover 50% of road shipment spend. Data for calculations was collected both manually and automatically from various internal and external sources, such as the company ERP system and logistics service providers’ (LSP) reporting. DC processes were studied in practice and compared to model processes. Currently used freight rates were compared to existing pricing models and freight service tendering process was evaluated by participating in the process and comparing it to the models based on literature. The results show that the potential savings are not as significant as the company hoped for, mainly because of packing work increasing DC labor cost. Annual savings by setting ideal split volume per country would account for 0,4 % of the warehousing and transportation costs of shipments in scope of this thesis. Split volume should be set separately for each route, mainly because the pricing model for road freight is different in each country. For some routes bigger parcels should be sent but for some routes pallets should be used more. Next step is to do these calculations for remaining routes to determine total savings potential. Other findings show that the processes in the DC are designed well and the company could achieve savings by executing tenders more efficiently. Company should also pay more attention to parcel pricing and packing the shipments accordingly.

Lisenssien hinnoittelupäätösten tärkeys ohjelmistoliiketoiminnassa

Tavoite on selvittää hinnoittelupäätöksien noudattamista ohjelmistoliiketoimintaa harjoittavassa yrityksessä. Lisäksi syitä noudattamiseen ja noudattamatta jättämiseen sekä asiakkaiden hinnoittelutoiveisiin selvitettiin. Teoriassa esitellään kolmea hinnoittelumallia, kuinka näitä malleja käytetään käytännössä? Teoriaosuudessa käsitellään hintaa, hinnoittelua, hinnoittelumalleja ja ohjelmistoliiketoiminnan piirteitä. Empiirisessä osassa tehdään laadullista tutkimusta henkilökohtaisilla puolistrukturoiduilla haastatteluilla, joista kerätään tarjousten kanssa tutkimuksen aineisto. Tutkimusmateriaalin pohjalta vastataan tutkimuskysymyksiin. Vaikka käytännöt olisivat valideja, mutta mikäli hintoja ei nähdä järkevinä, käytännöistä on joustettava. Kohdetuotteilla pitäisi myös olla yhtäläiset hinnoittelumallit. Pääsyyksi käytännöistä joustamiseen nähtiin kohdeasiakkaan olevan avainasiakas tai kilpailijan tarjouksen voittaminen.

Public-private partnership investments in dry ports – Russian logistics markets and risks

The investments have always been considered as an essential backbone and so-called ‘locomotive’ for the competitive economies. However, in various countries, the state has been put under tight budget constraints for the investments in capital intensive projects. In response to this situation, the cooperation between public and private sector has grown based on public-private mechanism. The promotion of favorable arrangement for collaboration between public and private sectors for the provision of policies, services, and infrastructure in Russia can help to address the problems of dry ports development that neither municipalities nor the private sector can solve alone. Especially, the stimulation of public-private collaboration is significant under the exposure to externalities that affect the magnitude of the risks during all phases of project realization. In these circumstances, the risk in the projects also is becoming increasingly a part of joint research and risk management practice, which is viewed as a key approach, aiming to take active actions on existing global and specific factors of uncertainties. Meanwhile, a relatively little progress has been made on the inclusion of the resilience aspects into the planning process of a dry ports construction that would instruct the capacity planner, on how to mitigate the occurrence of disruptions that may lead to million dollars of losses due to the deviation of the future cash flows from the expected financial flows on the project. The current experience shows that the existing methodological base is developed fragmentary within separate steps of supply chain risk management (SCRM) processes: risk identification, risk evaluation, risk mitigation, risk monitoring and control phases. The lack of the systematic approach hinders the solution of the problem of risk management processes of dry port implementation. Therefore, management of various risks during the investments phases of dry port projects still presents a considerable challenge from the practical and theoretical points of view. In this regard, the given research became a logical continuation of fundamental research, existing in the financial models and theories (e.g., capital asset pricing model and real option theory), as well as provided a complementation for the portfolio theory. The goal of the current study is in the design of methods and models for the facilitation of dry port implementation through the mechanism of public-private partnership on the national market that implies the necessity to mitigate, first and foremost, the shortage of the investments and consequences of risks. The problem of the research was formulated on the ground of the identified contradictions. They rose as a continuation of the trade-off between the opportunities that the investors can gain from the development of terminal business in Russia (i.e. dry port implementation) and risks. As a rule, the higher the investment risk, the greater should be their expected return. However, investors have a different tolerance for the risks. That is why it would be advisable to find an optimum investment. In the given study, the optimum relates to the search for the efficient portfolio, which can provide satisfaction to the investor, depending on its degree of risk aversion. There are many theories and methods in finance, concerning investment choices. Nevertheless, the appropriateness and effectiveness of particular methods should be considered with the allowance of the specifics of the investment projects. For example, the investments in dry ports imply not only the lump sum of financial inflows, but also the long-term payback periods. As a result, capital intensity and longevity of their construction determine the necessity from investors to ensure the return on investment (profitability), along with the rapid return on investment (liquidity), without precluding the fact that the stochastic nature of the project environment is hardly described by the formula-based approach. The current theoretical base for the economic appraisals of the dry port projects more often perceives net present value (NPV) as a technique superior to other decision-making criteria. For example, the portfolio theory, which considers different risk preference of an investor and structures of utility, defines net present value as a better criterion of project appraisal than discounted payback period (DPP). Meanwhile, in business practice, the DPP is more popular. Knowing that the NPV is based on the assumptions of certainty of project life, it cannot be an accurate appraisal approach alone to determine whether or not the project should be accepted for the approval in the environment that is not without of uncertainties. In order to reflect the period or the project’s useful life that is exposed to risks due to changes in political, operational, and financial factors, the second capital budgeting criterion – discounted payback period is profoundly important, particularly for the Russian environment. Those statements represent contradictions that exist in the theory and practice of the applied science. Therefore, it would be desirable to relax the assumptions of portfolio theory and regard DPP as not fewer relevant appraisal approach for the assessment of the investment and risk measure. At the same time, the rationality of the use of both project performance criteria depends on the methods and models, with the help of which these appraisal approaches are calculated in feasibility studies. The deterministic methods cannot ensure the required precision of the results, while the stochastic models guarantee the sufficient level of the accuracy and reliability of the obtained results, providing that the risks are properly identified, evaluated, and mitigated. Otherwise, the project performance indicators may not be confirmed during the phase of project realization. For instance, the economic and political instability can result in the undoing of hard-earned gains, leading to the need for the attraction of the additional finances for the project. The sources of the alternative investments, as well as supportive mitigation strategies, can be studied during the initial phases of project development. During this period, the effectiveness of the investments undertakings can also be improved by the inclusion of the various investors, e.g. Russian Railways’ enterprises and other private companies in the dry port projects. However, the evaluation of the effectiveness of the participation of different investors in the project lack the methods and models that would permit doing the particular feasibility study, foreseeing the quantitative characteristics of risks and their mitigation strategies, which can meet the tolerance of the investors to the risks. For this reason, the research proposes a combination of Monte Carlo method, discounted cash flow technique, the theory of real options, and portfolio theory via a system dynamics simulation approach. The use of this methodology allows for comprehensive risk management process of dry port development to cover all aspects of risk identification, risk evaluation, risk mitigation, risk monitoring, and control phases. A designed system dynamics model can be recommended for the decision-makers on the dry port projects that are financed via a public-private partnership. It permits investors to make a decision appraisal based on random variables of net present value and discounted payback period, depending on different risks factors, e.g. revenue risks, land acquisition risks, traffic volume risks, construction hazards, and political risks. In this case, the statistical mean is used for the explication of the expected value of the DPP and NPV; the standard deviation is proposed as a characteristic of risks, while the elasticity coefficient is applied for rating of risks. Additionally, the risk of failure of project investments and guaranteed recoupment of capital investment can be considered with the help of the model. On the whole, the application of these modern methods of simulation creates preconditions for the controlling of the process of dry port development, i.e. making managerial changes and identifying the most stable parameters that contribute to the optimal alternative scenarios of the project realization in the uncertain environment. System dynamics model allows analyzing the interactions in the most complex mechanism of risk management process of the dry ports development and making proposals for the improvement of the effectiveness of the investments via an estimation of different risk management strategies. For the comparison and ranking of these alternatives in their order of preference to the investor, the proposed indicators of the efficiency of the investments, concerning the NPV, DPP, and coefficient of variation, can be used. Thus, rational investors, who averse to taking increased risks unless they are compensated by the commensurate increase in the expected utility of a risky prospect of dry port development, can be guided by the deduced marginal utility of investments. It is computed on the ground of the results from the system dynamics model. In conclusion, the outlined theoretical and practical implications for the management of risks, which are the key characteristics of public-private partnerships, can help analysts and planning managers in budget decision-making, substantially alleviating the effect from various risks and avoiding unnecessary cost overruns in dry port projects.

Liquidity Risk in the Finnish Stock Market

This study explores the pricing of liquidity risk and its effect on stock returns in the Finnish stock market. In addition to that, it investigates whether there is a trend in liquidity risk. Finally, it analyzes whether the two chosen liquidity measures provide different results. The data consists of all the common shares listed in the Finnish stock market during the period of 1/1997–7/2015. To examine whether liquidity risk affects stock returns in the Finnish stock market, this study utilizes a conditional version of liquidity-adjusted capital asset pricing model (LCAPM) by Acharya and Pedersen (2005). Two recently proposed illiquidity measures – PQS and AdjILLIQ – are used in the empirical estimation to see whether there are differences in the results between the measures. The time-varying conditional liquidity risks are estimated by using a multivariate DCC-GARCH model, while the pricing of the liquidity risk is conducted by applying fixed effect panel regression. The results imply that investors in the Finnish stock market are willing to pay a premium to hedge from wealth shocks and having liquid assets during the declined market liquidity. However, investors are not willing to pay a premium for stocks with higher returns during illiquid markets. The total annualized illiquidity premiums found in the Finnish stock market are 1.77% and 1.04%, based on the PQS and AdjILLIQ measures, respectively. The study also shows that liquidity risk does not exhibit decreasing trend, and investors should consider liquidity risk in their portfolio diversification in the Finnish stock market.