Browsing by Subject "investment"

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  • Liljeblom, Eva; Vaihekoski, Mika (Elsevier, 2010)
    Increased media exposure to layoffs and corporate quarterly financial reporting have created arguable a common perception – especially favored by the media itself – that the companies have been forced to improve their financial performance from quarter to quarter. Academically the relevant question is whether companies themselves feel that they are exposed to short-term pressure to perform even if it means that they have to compromise company’s long-term future. This paper studies this issue using results from a survey conducted among the 500 largest companies in Finland. The results show that companies in general feel moderate short-term pressure, with reasonable dispersion across firms. There seems to be a link between the degree of pressure felt, and the firm’s ownership structure, i.e. we find support for the existence of short-term versus long-term owners. We also find significant ownership related differences, in line with expectations, in how such short-term pressure is reflected in actual decision variables such as the investment criteria used.
  • Lappi, Juha; Siitonen, Markku (Suomen metsätieteellinen seura, 1985)
  • Kauppi, Heikki; Koskela, Erkki; Stenbacka, Rune (2004)
    2
    We study the implications of product market competition and investment for price setting, wage bargaining and thereby for equilibrium unemployment in an economy with product and labour market imperfections. We show that intensified product market competition will reduce equilibrium unemployment, whereas the effect of increased capital intensity is more complex. Higher capital intensity will decrease the equilibrium unemployment when the elasticity of substitution between capital and labour is less than one, while the reverse happens when this elasticity is higher than one but smaller than the elasticity of substitution between products. Finally, we demonstrate how labour and product market imperfections, characterized by the wage and price setting mark-ups, affect the optimal capital stock. Our findings raise important questions for future empirical research.
  • Luo, Wen (Helsingfors universitet, 2014)
    The main purpose of this Master’s thesis was to examine the impacts of distance factors on the equity-based entry mode choice of forest multinational companies (MNCs) by testing the distances (both in cultural and geographical terms) combined with corporate and local factors. China was chosen as the case host country in this study, and the collected data followed the top global forest MNCs that made investments in China at the subsidiary level. Based on a series of internationalization theories and previous studies, 8 hypotheses were proposed. These hypotheses were suppositions of selected factors having positive or negative impacts on the preference of MNCs for wholly owned subsidiaries (WOS) rather than the joint venture (JV) mode. Logistic regression was utilized as the methodology to test these hypotheses.The dependent variables were defined as WOS vs. JV, and the selected independent variables were cultural and geographical distance, experience of the host country, investment size, resource commitment and geographic concentration. The development and status quo of forest foreign investment in China were given by a descriptive statistical analysis. The results demonstrated that the most popular home countries of the forest corporations in this case were the US, Japan, Hong Kong and Singapore, and the most common investment locations in China were the east coastal regions. Furthermore, foreign investment in the forest industry showed differences between historical stages and economic regions. The statistical results indicate that a greater geographical distance, experience of the host country, and geographical concentration have positive impacts on the preference for WOS, while the CDI has a negative impact on it. However, investment size and resource commitment showed no impact on the equity-based entry mode choice in this study. The conclusions at the end of this thesis describe the future trend in and potential for forest foreign investment in China.
  • Alvarez, Luis H. R.; Stenbacka, Rune (Svenska handelshögskolan, 2001)
    Working Papers
    This study develops a real options approach for analyzing the optimal risk adoption policy in an environment where the adoption means a switch from one stochastic flow representation into another. We establish that increased volatility needs not decelerate investment, as predicted by the standard literature on real options, once the underlying volatility of the state is made endogenous. We prove that for a decision maker with a convex (concave) objective function, increased post-adoption volatility increases (decreases) the expected cumulative present value of the post-adoption profit flow, which consequently decreases (increases) the option value of waiting and, therefore, accelerates (decelerates) current investment.
  • Liljeblom, Eva; Vaihekoski, Mika (Svenska handelshögskolan, 2007)
    Research Reports
    Increased media exposure to layoffs and corporate quarterly financial reporting have created arguable a common perception – especially favored by the media itself – that the companies have been forced to improve their financial performance from quarter to quarter. Academically the relevant question is whether the companies themselves feel that they are exposed to short-term pressure to perform even if it means that they have to compromise company’s long-term future. This paper studies this issue using results from a survey conducted among the 500 largest companies in Finland. The results show that companies in general feel moderate short-term pressure, with reasonable dispersion across firms. There seems to be a link between the degree of pressure felt, and the firm’s ownership structure, i.e. we find support for the existence of short-term versus long-term owners. We also find significant ownership related differences, in line with expectations, in how such short-term pressure is reflected in actual decision variables such as the investment criteria used.
  • Ahvenniemi, Rasmus (2005)
    This thesis considers an investment game, in which two firms invest in R&D in order to obtain an innovation. It is assumed that a permissive patent system is in use, which allows the fragmentation of immaterial property rights among several innovators in cases of simultaneous discovery. The objective is to shed light into the firms' investment behavior using a game-theoretical model. It is assumed that initially there is an inter-firm difference in product quality, observable by the utility-maximizing consumers. The game consists of two stages: In the first stage, each firm decides on the sum that it is going to invest in R&D. Investment may result in a product quality-improving discovery. In the second stage, the firms engage in either Bertrand or Cournot competition, which are examined as separate cases. By examining the Nash equilibrium of the firms' investments it is determined, under which parameter configurations each firm invests a positive sum in R&D. There are three parameters in the model: (i) the initial inter-firm difference in product quality, (ii) the quality-improvement resulting from an innovation and (iii) a parameter reflecting the relationship between the sum invested and the probability of making a discovery, thereby reflecting the cost of innovation. Because the mathematical expressions arrived at are complex, numerical computations done on a computer are applied in order to obtain useful results. Based on the numerical results, conclusions are drawn regarding the three parameters' influence on the firms' investment decisions. The following results are arrived at: (i) Both firms are more likely to invest in cases of inexpensive and/or highly significant discoveries. (ii) The firm producing the higher-quality product is more likely to invest. (iii) In the case of the firm producing the lower-quality product, a large initial inter-firm difference in product quality reduces the firm's willingness to invest under Cournot competition, but increases it under Bertrand competition. (iv) Both firms are more likely to invest under Cournot competition than under Bertrand competition. (v) Under Bertrand competition, the firm selling the lower-quality product is less likely to invest if obtaining an innovation might make the products similar in quality.
  • Peremanova, Kateryna (Helsingfors universitet, 2011)
    This paper identifies an issue of under-investment in wind energy in Poland and analyses it from the perspective of market efficiency. It argues that higher required returns from wind energy assets in Poland are a result of both greater investment risks as well as a certain market inefficiency which leads to wind asset under-pricing and reduced investment.We hypothesize that the same risks which affect investment directly through the cost of capital for wind projects create conditions which are potential sources of market inefficiency. The conditions discussed are: information and transaction costs and market entry barriers. We explore the general wind energy investment environment as well as the electricity market structure and renewable energy policy design to identify the presence of the three conditions above. In the course of this discussion, we find that the wind asset market in Poland contains specific information and transaction costs and entry barriers, substantiating a case for market inefficiency and requiring further research.