Commercial law


Recent Submissions

  • Owen, Robyn; Lehner, Othmar; Lyon, Fergus; Brennan, Geraldine (2020-01-07)
    How might a Green New Deal be applied to the early stage financing of Cleantechs? Amidst rising interest and adoption of Green New Deals in the US, the paper explores the need for more focused policy to address early stage long horizon financing of Cleantechs. We argue that insufficient focus has been applied to early stage investing into these types of innovative SMEs that could lower CO2 emissions across a range of sectors (including renewable energy, recycling, advanced manufacturing, transport and bio-science). Adopting a resource complementarity lens and borrowing from transaction cost theory, we illustrate and build theory through longitudinal UK case studies. These demonstrate how government policy can scale-up through international collaboration public-private, principally venture capital, co-finance to facilitate cleantech innovation with potentially game changing impacts on reducing CO2 emissions in order to meet the Paris 2015 Climate Change targets.
  • Binder, Christina; Lehner, Othmar (2020-01-07)
    The article uses a bank’s credit data to study the impact of the Basel IV regulations on risk weight density (RWD). The analysis of the simulated data shows mixed results, as the improvement of risk weight heterogeneity is restricted to optimistically valued portfolios. Conservatively valued portfolios are likely to be confronted with an RWD decrease. However, within these portfolios, risk weight heterogeneity usually does not play an important role. Out of all the analysed Basel IV rules, the output floor clearly has the biggest influence on risk weight density, while the effect of the input floors is very limited within optimistically valued portfolios and is even eliminated by the removal of the scaling factor within conservatively valued portfolios. The change in RWD will also lead to a concurrent change in risk-weighted assets and therefore also in the level of eligible capital. The findings within the retail portfolio confirm those of the EBA study, which already suggested that Basel IV and especially the output floor will lead to a significant increase of risk capital (European Banking Authority, 2018).
  • Kellgren, Jan; Furuseth, Eivind; Kukkonen, Matti (2019-08-03)
    For a correct application of tax laws, it is central to know at what time or period the conditions of each case are to be tested against the respective tax rule. For example, in many questions, the conditions at the time of the transaction are decisive, but not seldom the tax rules take aim at the conditions at the end of the year – or some other time or period. It is also important to know what significance should be given to events after this time or period, not least when the income declaration is made and assessed. Here, these partly overlooked questions are presented and analyzed from the Swedish, Norwegian and Finnish income tax-perspectives.
  • Simon, David (2019)
    This Article critically examines the analogies scholars use to explain the special relation between the author and her work that copyright law protects under the doctrine of moral rights. The goal of this Article is to determine “when to drop the analogy and get on with developing the” content of the relation between the author and the work.” Upon examination, that moment approaches rather quickly: none of these analogies provide any helpful framework for understanding the purported relation. At worst, they are misleading rhetorical devices used to gain support for moral rights. At best, these analogies are first attempts at describing the relation between author and her work. So I assume that analogies are valuable as starting points for thinking about the relation between the author and her work, rather than explaining the nature of the relation. Even when viewed this way, however, the analogies raise more questions than they purport to answer. Because the analogies discussed do not explain the author-work relation, scholars must look elsewhere for arguments to support moral rights.
  • Ittonen, Kim; Myllymäki, Emma-Riikka; Tronnes, Per Christen (2019-07-01)
    Purpose This paper focuses on bankaudit committees and examines whether audit committee members who are formerauditors are associated with the acquisition of audit and non-audit servicesfrom their former employers.   Design/methodology/approach The study empirically examinesa sample of large banks that are included in the S&P Composite 1500.   Findings The paper reportssignificantly lower audit fees and a higher proportion of non-audit fees tototal fees when the audit committee chair is an alumnus of the incumbent auditfirm. Moreover, additional analysis reveals that these findings are strongerfor banks with more earnings management.   Researchlimitations/implications Overall, the findings indicatethat audit firms might consider banks using their alumni as audit committeechairs to be less risky or easier to audit, thus requiring relatively lesseffort from the auditors. The reduced effort required to audit clients withaudit firm alumni on their audit committees then has the effect of reducing theaudit fees charged. Alternatively, their auditing experience and cognitiveproximity might influence the assessment of the need for auditing or theability to negotiate lower audit fees on the part of audit firm alumni.   Originality/value This paper provides empiricalevidence of the association between audit firm alumni in influential positionson an audit committee and fees paid to those audit firms in the bankingindustry. The findings contribute to the literature by suggesting that bankswith affiliated former auditors chairing their audit committees not only havesignificantly lower audit fees but also a higher proportion is spent onnon-audit services.
  • Sundvik, Dennis (2019-06-07)
    Purpose The purpose of this paper is to explore whether principles-based vs rules-based accounting standards have an effect on measures of financial reporting quality and earnings management strategies. Design/methodology/approach This study uses a firm-year-specific variable that captures the extent to which firms’ accounting and operating behavior is affected by the characteristics of a specific standard in the USA. Measures of absolute accruals, financial misconducts, signed abnormal accruals and abnormal cash flows are used to assess the effects. Findings The results show that absolute magnitude of accruals and probability of financial misconduct is lower, and accrual earnings management is higher when firms’ standards are more based on principles. The study also suggests that potentially costlier real earnings management is a consequence of rules-based standards. Research limitations/implications This study relies heavily on measures from the prior accounting literature, hence, care has been exercised in generalizing the findings. Practical implications This study has direct implications for a number of stakeholders, including standard setters, policymakers, securities regulators, researchers, investors, financial statement preparers and auditors. For example, the future development of accounting standards can be supported by the empirical conclusions in this study together with previous standard-setting ambitions, commentaries, experiments and analytical work. Originality/value This study extends prior single-country studies on reporting quality and cross-country studies on transition effects of firms switching from local to International Accounting Standards by observing the impact of accounting standard characteristics on additional measures of reporting quality and accrual as well as real earnings management when holding institutional factors constant. The study also offers archival evidence complementing prior commentaries, experiments and analytical work.
  • Bruun, Niklas; Norrgård, Marcus (2018-12-20)
  • Pitkänen, Olli (Helsinki Institute for Information Technology HIIT, 2002)
  • Pitkänen, Olli Pekka; Heikkilä-Kauppinen, Marja (2018-02-21)
  • Siekkinen, Jimi Ville-Pekka (2016-06-09)
    This paper examines whether audit quality and auditor independence have an impact on the information quality of fair values. It is assumed that higher audit quality and higher auditor independence decrease the incentives for managerial opportunism, thereby increasing investors' trust in book values. By analysing financial firms from 28 European countries, this study finds evidence that non-audit services have a positive association with the value relevance of Level 3 fair value assets. Furthermore, the more important the client is to the auditor, the lower is the value relevance of fair value estimates (Level 3). The association between a Big 4 auditor and the information quality of fair value estimates depends on the legal traditions in the firm's home country. The association is positive or non-existent in Northern and Western European countries and negative in Southern and Eastern European countries.
  • Siekkinen, Jimi Ville-Pekka (2017)
  • Timmer, Ryan; Broussard, John Paul; Booth, G. Geoffrey (2018-01-21)
    We study the asset allocation decision of a life insurance company’s general account with respect to the possibility of large negative economic shocks and examine how this account is affected by policyholder investment decisions in the company’s separate account. This is accomplished using a performance metric that incorporates downside risk measured using univariate and multivariate extreme value distributions. Because of its well-known price volatility, diversification attributes, and significant weight in the combined general and separate accounts, our primary focus is the company’s equity investments. Although industry asset allocations have varied over the past two decades, we find that the actual allocations to equity in the general account are close to the allocation percentages suggested by our extreme value metrics and both are far below the maximum values indicated by the relevant regulatory bodies.
  • Flores Ituarte, Inigo; Salmi, Mika; Ballardini, Rosa; Tuomi, Jukka; Partanen, Jouni (2017-09-26)
    The objective of this research is to define an optimal innovation policy and funding strategy to improve Additive Manufacturing (AM) capabilities in Finnish companies. To do so, we present an international review of innovation programs in the area of AM. In addition, the study replied upon a survey prepared to evaluate factors for AM implementation. The ultimate goal is to help in the definition of a national policy strategy in the area of AM based on the characteristics of the Finnish industrial ecosystem. The methodology and data collection method involved defining the taxonomy of Finnish AM industry. The target group of the survey was a population of AM experts, and individuals with knowledge on AM and industrial processes. Overall, the survey revealed that research and innovation activities are well positioned in Finland. In order for future innovation policies to further support developments in the field, we estimated that policy strategies need to generate about 6-8 M€/year in national and EU- funding instruments for AM technology transfer, development, and innovation activities. Efforts should be targeted towards strengthening uses of AM in final production. In fact, only 36% of Finnish respondents declared to use AM for final production, while leading countries in AM use it in average more than 50%. Another area in need of development in Finland is the use of AM high performance materials. Moreover, outsourcing of AM services in Finland is 23 percentage point higher in national and 13 percentage point higher in international outsourcing to service bureaus and suppliers. In this regard, future policies and funding strategies should maintain the created momentum. However, there is a need to acquire high-end research and industrial equipment to stimulate AM integration to the existing production systems. This in the end can trigger the creation of new products, processes and intellectual property, enabling innovation and competitive advantage.
  • Pitkänen, Olli Pekka; Ruuska, Petra (IPR University Center, 2017)
  • Pitkänen, Olli Pekka (Kunnallisalan kehittämissäätiö, 2017)
  • Andres, Pablo de; Arranz-Aperte, Laura; Rodriguez-Sanz, Juan Antonio (2017)
    Our study reveals how two separate dimensions of board composition-the proportion of independent directors and of non-independent directors-influence CEO compensation in Western European firms. Controlling for the simultaneous determination of CEO pay structure and board design, we find that firms with a higher proportion of non-independent outsiders on their boards pay less direct compensation (salary + bonus) and less equity-linked compensation to their CEOs. By contrast, CEOs working for firms with more independent boards receive more equity based-pay. When we control for the fact that equity linked is not granted systematically in Europe we find that firms with more independent directors on the board tend to grant equity linked compensation more often than firms with more non independent outside directors. Our results challenge the commonly accepted view of independent directors as safeguards of shareholder value, uncovering the relevance of non-independent outsiders for pay moderation and incentives.

View more