Does party identification associate with consumer preferences? Analyzing Finnish consumers in 2009 and 2014

This article examines the association between Finn's political orientation and preferences regarding hedonistic and mundane consumer activities. Data derived from national‐level surveys collected in Finland in 2009 (n=1,202) and 2014 (n=1,351) suggests that political party identification is an important predictor of perceived consumption, even after controlling for the effects of key socio‐demographic factors. In general, supporters of the right‐wing National Coalition Party consider themselves as high‐level consumers more often than the supporters of other political parties do. The results also show that there have been very few temporal changes in the association between party identification and consumption preferences. The effect of party identification is stronger for hedonistic activities than for mundane activities. It is argued that political party identification has similar impact on individual's consumer preferences as other lifestyle and social network factors have. The findings offer us new possibilities for further research addressing consumer activities, and other behavioural correlates of political orientation.     

Economic and normative pressures as drivers for the adoption of International Accounting Standards in Finland since 1976

Abstract

This paper deals with the internationalisation of Finnish business life and the attempts to introduce and apply international accounting standards (IASs) in Finnish accounting practice before the latest developments at the EU level in 2002. The internationalisation of business life creating economic pressures for changes is illustrated. Analysis of four accounting issues is made in order to exemplify how IASs have affected Finnish accounting legislation and practice. The results of the analysis indicate that the effect of IASs has been notable but secondary because of the implementation of the EU Directives in Finnish accounting legislation in the 1990s. IASs have not caused any drastic changes in accounting practice as their requirements have been written as alternatives in legislation. This approach has provided a possibility to large, listed companies to produce financial accounting information in line with the principles of IASs. In the introduction of IASs there have been political aspects when justifications for the national model and for the international orientation have been presented.     

Technology,Labour Characteristics and Wage‐productivity Gaps*

We use plant‐level employer–employee data in production functions and wage equations to examine whether wages are based on productivity. We use a stepwise procedure to find out how the results are influenced by the kind of data that is available. The models include shares of employee groups based on age, level and field of education, and sex. The gap between the age‐related wage and productivity effects increases with age. Education increases productivity, but wage under‐compensates productivity especially for those with the highest level of non‐technical education. For women the results depend greatly on the specification and method used.     

Lower Bounds of Concentration in a Small Open Economy

We examine how Sutton’s “bounds” approach works in a small country where industries have relatively high export and import intensities. The bounds are estimated as stochastic frontiers, where observable industry characteristics, entry barriers, and export intensity are allowed to affect the mean and variance of the deviations from the frontier. In accordance with the theory, high R&D intensity industries have a lower bound for concentration, which is higher than that for exogenous sunk cost industries. For high advertising industries the theory does not hold as well.      

Returns to workers and hours in finnish manufacturing

Production functions, where the number of workers, their average standard hours, and average overtime hours appear as separate inputs, are estimated using pooled data from Finnish industries. The results show that the returns to workers are higher than the returns to average hours and both returns are below one. This is in accordance with the assumption usually made in theoretical analyses of the demand for workers and hours. The productivity of overtime hours is slightly higher than that of standard hours. All the output elasticities are, however, fairly close to each other. Diagnostic tests show that there is collinearity between the explanatory variables, but application of several adaptive ridge estimators shows that this has not affected the results much.     

On the Interpretation of Value Efficiency

Halme et al., Management Science, 45, 103–115 (1999) have proposed Value Efficiency Analysis as an approach to incorporate preference information in Data Envelopment Analysis (DEA). Generally, a value function includes only ordinal information and thus a value efficiency score does not provide information on the value difference. The score only describes the improvements in the input/output values that are needed in order to make the Decision-Making Unit (DMU) as preferred as the Most Preferred Solution (MPS). This Paper discusses two sets of additional assumptions that enable us to give the efficiency score a value difference interpretation.     

The effects of foreign disturbances under flexible exchange rates

Foreign fiscal expansion has a contractionary, and monetary expansion an expansionary, effect on the small economy in the real wage model. The reverse conclusions hold in the money wage model only if the income elasticity of the demand for money is one or greater. The same results hold also for the stationay state effects. This theory provides an explanation—in the policy mix of the United States—for the recent lacklustre performance of Europe. Under rational expectations, foreign monetary expansion leads to an overshooting appreciation, fiscal expansion leading to several possible exchange rate responses. The new results are produced by consistently specified money demand and import functions, the supply side, and the wealth effect.     

Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone

Available statistics reveal little about the economic consequences of the increasing global dispersion of production processes. To investigate the issue, we perform grass-roots investigative work to uncover the geography of the value added for a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. When the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it played little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the flow of physical goods. Instead, services and other intangible aspects of the supply chain dominate. While final assembly—commanding 2% of the value added in our case—has increasingly moved offshore, the developed countries continue to capture most of the value added generated by global supply chains.     

STRATEGIC R&D AND NETWORK COMPATIBILITY

We analyse the effects of network externalities in strategic R&D competition. We present a model of two firms competing with R&D investments and prices in a differentiated consumer market. Buyers form firm-specific networks which can be compatible. A high degree of compatibility and large spillovers moderate price competition due to weak strategic value of firm-specific networks and R&D investments, respectively. Asymmetry in product qualities brings out network effects that cancel out in conventional symmetric settings. The lower quality firm increases R&D and decreases its price as spillovers or network compatibility is increased. This happens when R&D and firm-specific network size have high strategic value.