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  • Gripenberg, Jonas (Svenska handelshögskolan, 2022-11-30)
  • Jansson, Jonas (Svenska handelshögskolan, 2022-11-30)
  • Ahlbom, Kim (Svenska handelshögskolan, 2022-11-30)
  • Kettunen, Jukka (Hanken School of Economics, 2022-11-24)
    Regulation is a tool policymakers use to tackle national and global challenges. Currently, several regulators including the EU are in the process of adopting and issuing new corporate social responsibility (CSR) disclosure laws. The overarching aim of these laws is to encourage companies to develop a responsible approach to business. Consequently, they are likely to induce fiscal and real effects, some of which may be unintended. This calls for research on the economic consequences of mandatory CSR disclosure. Hence, this dissertation conducts a post-implementation review of CSR disclosure laws using difference-in-differences estimation. Specifically, applying the regulatory cost-benefit analysis (CBA) as a framework this dissertation examines the related adoption costs, benefits, and externalities with three distinct essays. The first essay analyzes the nature and the cross-country variation of the magnitude and stickiness of the adoption costs of mandatory CSR disclosure laws. The results show that the adoption increases administrative, but not production-related costs. The average annual increase in SG&A is 2% after the adoption. The costs as well as cost stickiness vary by country. Adoption costs are more pronounced in shareholder-oriented countries characterized by common law legal origin, high shareholder litigation risk and lenient employment protection. The second essay examines whether mandatory CSR disclosure laws affect audit fees. Given that the environmental, social and governance elements of mandatory CSR disclosures have significant commonalities with the auditors’ risk assessment procedures targeted at obtaining an understanding of the entity and its environment (ISA 315), the results suggest a significant decrease in audit fees after the adoption. The fee-decrease is more pronounced in audit markets prone to price-competition and in companies where regulatory environment is stronger in the parent company headquarter country than in the subsidiary countries. Audit risk and complexity dampen the fee-decrease. The third essay examines whether mandatory CSR disclosure laws have externalities on companies not subject to these laws. The findings indicate that companies in the adopting countries increase capital expenditure and employment relative to companies in non-adopting countries. The presence of regulated firms in the industry moderates these investment and employment activities which are weakly related to growth opportunities. Overall, the findings imply that the spillover effects in non-disclosing firms represent a strategic response to competitive threats. The main contribution of the thesis lies in documenting evidence of the unintended economic consequences of mandatory CSR disclosure. Those consequences can be categorized as adoption costs, benefits, and externalities. First, the results imply that the adoption begins primarily as an administrative rather than productional reform, and the adoption is more expensive in shareholder-oriented countries. Second, while increasing costs, the mandates can bring benefits to the adopting companies in terms of lower audit fees. Third, the results illustrate the importance of spillover effects to preparers of reporting mandates: competitive forces may extend the scope of regulation to unregulated firms.
  • Buttler, Pekka (Hanken School of Economics, 2022-11-23)
    Projects today make up roughly one third of GDP in developed nations. In many industries, the share of projects is even higher. Simultaneously – as we all are aware – projects fail too often for comfort. Project failure has two faces: On the one hand projects may be finished late, and cost more than expected, while the result’s functionality may also leave something to be desired. In short: the project was not done right. On the other hand, projects may turn out to have produced its result exactly to specifications, on time and within budget, only for it to turn out that the result is not what was needed, or that a different solution might have served everyone’s needs better. In short: not the right project was done. The topics of this dissertation – project concepts and project concept design – play a central role in helping private and public organizations do the right project. As is argued in this dissertation, projects are commenced in the hope of making project concepts – the central, founding ideas for a project – come true. Hence, the question of doing the right project is essentially a question of designing the right project concepts. However, understanding the significance of project concept design is not the same as knowing how to design the right project concepts. Given that very little research on this topic exists, the dissertation and its essays set out to offer some fundamental concepts, outlining avenues for further research and tools to aid researchers in pursuing those avenues. This dissertation contributes to the literature of the Study of Projects in several ways. First, it describes what project concepts are, showing that project concepts are both dualities and multiplicities. Second, it highlights the significance of the process and practice of project concept design and identifies five core functions (alignment, meshing, articulation, consideration, evaluation) through which project concept design can contribute to doing the right project. Third, the dissertation concludes that while project concept design primarily supports doing the right project, it also can contribute to doing the project right. Fourth, the dissertation discusses several environmental factors that contribute to or inhibit successful project concept design. Fifth, it discusses the practical difficulties facing endeavours to study project concept design and outlines a practice-oriented research method that it argues could support future research.
  • Penttinen, Valeria (Hanken School of Economics, 2022-11-23)
    The rapidly increasing availability of online data and information has led to shifts in information asymmetry experienced by firms and consumers, who now can make more informed decisions than ever before. However, both firms and consumers also experience challenges related to leveraging the available data and information. For firms, these challenges mainly relate to developing analytical capabilities that allow working with data from different sources and using such data in decision making. For consumers, these challenges are primarily associated with navigation through large amounts of online information without experiencing information overload. This dissertation engages in the ongoing discussion about the shifts in the firm-consumer information asymmetry driven by the increasing availability of online data and information. In addition to discussing the opportunities linked to the firm-consumer information asymmetry shifts, it attends to overcoming the associated challenges faced by both stakeholder groups. In doing so, this dissertation relies on three essays. Essay 1 addresses the importance of the development and use of analytical capabilities that extend beyond the boundaries of individual firms. The implications of this essay shed light on how firms can better leverage the available online data in decreasing information asymmetry for themselves as well as partners within their business networks. Essay 2 addresses how parasocial interaction fostered in consumer-to-consumer video reviews influence consumer purchase decisions. This essay provides insights into what kind of video reviews are most likely to help consumers make purchase decisions and how firms can help consumers access such reviews. Finally, Essay 3 examines how firms can leverage sharing brand communications through social media takeovers on their own social media accounts to strengthen relationships with consumers. This essay further elaborates on the importance of relationships formed on social media in helping firms gain unique consumer data and support consumers in accessing relevant and timely information. This dissertation challenges the traditional way of viewing transactions between firms and consumers by considering the use of increasingly available online data and information by both stakeholder groups. The implications of this dissertation further point to the increasing importance for firms to take more active stands in fostering information symmetry in the market.
  • Peters, Laura E. R.; Shannon, Geordan; Kelman, Ilan; Meriläinen, Eija (2022-11-22)
    Communities are powerful and necessary agents for defining and pursuing their health, but outside organizations often adopt community health promotion approaches that are patronizing and top-down. Conversely, bottom-up approaches that build on and mobilize community health assets are often critiqued for tasking the most vulnerable and marginalized communities to use their own limited resources without real opportunities for change. Taking into consideration these community health promotion shortcomings, this article asks how communities may be most effectively and appropriately supported in pursuing their health. This article reviews how community health is understood, moving from negative to positive conceptualizations; how it is determined, moving from a risk-factor orientation to social determination; and how it is promoted, moving from top-down to bottom-up approaches. Building on these understandings, we offer the concept of ‘resourcefulness’ as an approach to strengthen positive health for communities, and we discuss how it engages with three interrelated tensions in community health promotion: resources and sustainability, interdependence and autonomy, and community diversity and inclusion. We make practical suggestions for outside organizations to apply resourcefulness as a process-based, place-based, and relational approach to community health promotion, arguing that resourcefulness can forge new pathways to sustainable and self-sustaining community positive health.
  • Yang, Man; Leposky, Tiina (2022-11-09)
    The importance of value co-creation in servitization is increasingly emphasized but remains largely unexplored from the entrepreneurship theoretical perspective. This study develops an entrepreneurial framework for value co-creation in servitization by conducting a qualitative case study with middle managers from a multinational industrial company. The empirical findings suggest that value co-creation facilitates the discovery and creation of service opportunities through middle managers' entrepreneurial actions, that is, boundary spanning and bricolage. We also find that servitization reinforces value co-creation through middle managers' exploitation or exploration of service opportunities. The study not only offers new knowledge on the mutual influence between value co-creation and servitization, but also discusses the importance of middle managers as individual level actors in value co-creation. In addition, this study acts as a call for entrepreneurship frameworks for research on servitization.
  • Tikkanen, Hannu (Hanken School of Economics, 2022-11-08)
    The improvement of well-being has become an increasingly popular phenomenon both in the marketplace and in service research. Companies and researchers alike view technological innovations, such as devices and applications for self-tracking, as important means for consumers to manage and improve their well-being. At the same time, political and societal shifts are driving a responsibilisation of well-being, in which tasks that used to belong to the welfare state become the responsibility of self-governing and agentic individuals. In this shift, structural, social, and political problems become framed as personal issues. This thesis explores the role of smart technology services in the responsibilisation of consumer well-being. Smart technology services are studied empirically in the context of devices and applications for self-tracking. Popular examples of these technologies include activity watches, smart rings, sleep monitors, and smart personal scales. Through three studies, this thesis contributes to Transformative Service Research and to marketing research on smart technologies with an improved understanding of how individual responsibility for well-being is constructed and carried out through consumer agency. The first study uses responsibilisation as a guiding theory in conducting a scoping review of academic articles in the field of Transformative Service Research. Through this review it provides a conceptualization of the different roles that service plays in contributing to consumer well-being. The second study adopts a structurationist perspective in empirically exploring how smart technology services portray well-being capabilities to consumers through their value propositions. Finally, the third study zooms in on how consumers as individuals use smart technology services as resources that shape and support agency for managing personal well-being. Collectively, the findings in this thesis show that smart technology services are used by consumers in structural contexts that influence their well-being. Smart technology services constitute resources with which responsibilized consumers can exert their agency towards different well-being goals. The thesis also discusses the implications of how these service frame problems and solutions relating to well-being in ways that emphasize either the individual or social and structural aspects. This knowledge is helpful for both researchers and managers in considering how service offerings can benefit consumer well-being.
  • Nilsson, Eva (2022-11-07)
    This article examines how corporate social responsibility (CSR) can serve as an external source of rents for governments that depend on foreign financing for state-building and development. The strategic, instrumental use of CSR has been overlooked in previous research on governments and CSR, especially in the Global South. To understand how CSR can serve as a lever for rents, the concept of “extraversion” is introduced to describe the way in which rent-seeking African governments instrumentalize their asymmetric external relations for political and private benefit. The connection between CSR and rent-seeking is analyzed through a case study of large gas investments in Tanzania. The article finds that the government has set up regulation that enables local and central government authorities to appropriate, mediate, reclaim, or possibly trick CSR practices to gain rents. Based on the study, two contributions are made to the literature on CSR and governments. First, the instrumental use of CSR in the Global South is added to the variety of perspectives that can be taken when studying government agency. Second, CSR is conceptualized as a potential stream of rents for governments to exploit. The article ends with discussing that the outcome of CSR in a rent-seeking environment depends on whether the leveraged resources are managed well to support peaceful and locally beneficial economic development or whether they serve private accumulation through corruption.
  • Hyytinen, Ari; Rouvinen, Petri; Pajarinen, Mika; Virtanen, Joosua (2022-11-06)
    We examine how machine learning (ML) predictions of high-growth enterprises (HGEs) help a budget-constrained venture capitalist source investments for a fixed size portfolio. Applying a design science approach, we predict HGEs 3 years ahead and focus on decision (not statistical) errors, using an accuracy measure relevant to the decision-making context. We find that when the ML procedure adheres to the budget constraint and maximizes the accuracy measure, nearly 40% of the HGE predictions are correct. Moreover, ML performs particularly well where it matters in practice—in the upper tail of the distribution of the predicted HGE probabilities.
  • Golf-Papez, Maja; Heller, Jonas; Hilken, Tim; Chylinski, Mathew; de Ruyter, Ko; Keeling, Debbie I.; Mahr, Dominik (2022-11-01)
    The metaverse has been heralded as a next frontier for fueling strategic business opportunities. At the same time, recent months have witnessed explosive volatility in the market potential of proposed metaverse offerings. As a result, businesses are struggling to set a meaningful strategic course through an uncharted and rapidly changing landscape. We argue that the success of developing and scaling the metaverse as a vibrant new business ecosystem is largely dependent on the understanding that it is a unified and immersive reality where the physical and synthetic customer experiences seamlessly converge. For this to work, businesses and their customers need to be able to suspend their disbelief that synthetic elements are inherently false. We therefore consider the metaverse as a differentiated experience by exploring the promise and perils of falsity. We discuss how businesses can strategically embrace falsity by harnessing its intended—as well as mitigating its unintended—consequences, as they maneuver through major technological challenges in capturing customer value. We offer a diverse set of examples that illustrate how these strategies translate into managerial actions to competitively succeed in this new reality.
  • Laakso, Mikael; Wise, Alicia; Snijder, Ronald (2022-11)
    This paper reports on some of the initial observations from an ongoing study focused on determining the preservation status of academic open access books. The central challenges discussed revolve around lack of common definitions, metadata, and established practices for openly recording preservation status for books.
  • Vozian, Katia (Hanken School of Economics, 2022-10-31)
    This dissertation is a collection of four empirical studies in the fields of financial economics. The first and second studies relate to the literature of climate economics and contribute to the policy discussions on climate-related transition risk. The last two studies build upon the literature of market microstructure and contribute to the policy discussions on speed in financial markets. The first study of this dissertation investigates whether and how climate-related transition metrics of European large corporate firms relate to the credit risk of these firms implied by credit default swap for different time horizons. Based on an empirical analysis of firm-specific historical data, I find that firms with higher Scope 1 GHG emissions have higher CDS-implied credit risk. This relationship is reflected even by 30-year CDS, particularly after 2015 when a shift in market awareness of transition risk occurred. Albeit the European CDS market is already pricing to some small extent the effect of emissions at different time horizons, other material climate-related transition metrics do not yet reflected. In the second study, we examine how climate-related transition metrics relate to firms’ credit ratings of corporate firms in advanced economies such as Europe and the USA. We find that high emissions tend to be associated with worse credit ratings. Yet firms that disclose emissions and a forward-looking commitment to cut emissions have lower credit risk, with the effect tending to be stronger for more ambitious targets. We also find that after the Paris agreement in 2015, European firms most exposed to climate transition risks saw their ratings deteriorate. The effect is larger for European than US firms, probably reflecting differential expectations around climate policy. The third study investigates how resilient are modern trading venues in a high-frequency environment with cross-venue fragmented order flow. We build a unique cross-venue dataset with millisecond resolution, covering two major competing stock exchanges, London Stock Exchange and Chi-X. Employing a Hawkes process methodology, we find that the average time for the stock market to return to normal after a shock is below known human response times, which is circa 600 milliseconds, suggesting that a substantial amount of stock market activity is run by trading bots responses. In the fourth study, we turn our attention to high frequency versus low frequency market data. We explore a set of neural network machine learning models on news and financial data to predict shock events in high-frequency and low-frequency market data. We find that the market movement in response to a piece of news may be instantaneous or, most likely, cumulative over time.
  • Vega, Diego; Arvidsson, Ala; Saïah, Félicia Rachel (2022-10-27)
    Purpose This study investigated how organizations can maintain their supply chain (SC) resilience in situations where high-impact shocks cannot be absorbed and what capabilities are needed. The article is an empirical exploration of a socio-ecological view of resilience in the SC context. Design/methodology/approach The case under study in this article is that of Médecins sans Frontières (MSF) and MSF's reconfiguration of its supply management processes in response to the supply shocks during the coronavirus disease 2019 (COVID-19) pandemic. In total, 503 internal documents and ERP extractions from six databases from late 2019 to September 2020, 43 semi-structured interviews and a 3-round policy Delphi process were used to investigate this phenomenon. Findings The authors' results show that throughout the pandemic, MSF adapted its procurement and supply processes to cope with supply shortages at both the international and local levels of the SC. This was possible due to the organization's capacity to use its exploitation and exploration capabilities of the organization at the same time. Research limitations/implications This research is based on the single in-depth case study of a medical aid organization. Further research should investigate this phenomenon in commercial companies with similar or different organizational structures. Originality/value This study constitutes a first attempt to empirically demonstrate that the four phases of the adaptive cycle put forth in the panarchy theory constitute a suitable representation of the reconfigurations that SCs follow in response to a high-impact shock. The study also adds to the growing body of knowledge on resilience by including ambidexterity as a mechanism to achieve resilience.
  • Heyns, Andries; Banick, Robert (2022-10-25)
    The traditional aim in transportation planning is to maximise gains associated with vehicular travel distances or times, indirectly prioritising populations that live near existing or proposed roads—remote populations that first require hours of walking to reach roads are overlooked. In this paper, rural roads optimisation is performed using a new model that estimates proposed roads’ accessibility gains, considering reductions in vehicular travel time and reductions in walking time required by remote populations to reach them. This ensures that even the most remote populations that may benefit from new roads are included in their evaluation. When presented with a large number of proposed roads and the requirement of determining a plan within a suitable budget, it is often infeasible to construct all proposed roads. In such instances, subsets of well-performing road-combinations that are evaluated with respect to multiple objectives need to be identified for analysis and comparison–for which multi-objective optimisation approaches can be employed. Traditional optimisation approaches return a small number of road-combination plans only, limited to user-specified budget levels and objective weight sets. This paper presents an innovative heuristic solution approach that overcomes such limitations by returning thousands of well-performing solutions scattered across a budget span, and not limited in number to user-specified objective weight sets at fixed budget levels. The heuristic is employed along with a more traditional weighted-sum integer-linear programming approach to determine high-quality road-combination plans selected from 92 roads recently proposed for construction in Nepal’s remote Karnali province. Using these two approaches with inputs from the new multi-modal accessibility model, it is illustrated how rural roads planning can be performed to the benefit of rural populations regardless of their proximity to roads. New planning and analysis benefits of the heuristic are demonstrated by comparing its solutions to those determined by the weighted-sum approach, providing a level of detail and sophistication not previously possible for rural roads planning and analysis.