In search of marginal environmental valuations — ecosystem services in Finnish forest accounting

There is currently substantial interest in valuing various services provided by different ecosystems. Concurrently economists have ascribed substantial effort on expanding traditional forest accounting systems by environmental services. This paper contributes to curtailing the existing gap between green accounting theory and applications for valuing forest ecosystem services. The multitude of links between forest ecosystem services and economy are characterized by the theoretical model for forest-economy interactions. By utilizing recently updated data we also incorporate empirical value estimates of these services comparable to other goods into Finnish forest accounting system. Finally, we discuss some problems encountered and clarify the interpretation of some value estimates incorporated to national forest account.     

Analysis of the Colorado potato beetle protection system in Finland

Invasive species, including plants, insects and other pests, are a serious threat to agricultural production and to the environment in general. Finland has traditionally had a favourable situation concerning invasives, partly due to its isolated geographical location. The situation may now be changing and one of the currently increasing threats is the Colorado potato beetle (CPB). Finland has designed a CPB protection policy incorporating a protected zone, which is commonly used to deal with invasive plant pests in other European countries. Within this zone, the randomly occurring CPB invasions are collectively fended off, to prevent the establishment of a permanent pest population and to minimise potential damage. This paper evaluates the economics of the current protection programme, comparing this to a hypothetical situation in which the current pre-emptive policy is abandoned and control relies on producers' individual reactive protection measures. The annual random pest invasions are modelled in a static stochastic framework. To date the pest has not been able to establish a permanent population in Finland. According to our analysis, the currently exercised pre-emptive policy is the cost-efficient choice at this point. The relatively low expected invasion magnitude is one of the key factors supporting the efficiency of the current system. Another reason is the fairly small damage incurred. However, when the invasions become larger and more frequent or the pest strains more cold-resistant, the future situation may change.     

How to build a strategic network: A practitioner-oriented process model for the ICT sector

One critical success factor for the future will be the ability to build and develop strategic networks. This ability is especially vital in the dynamic information and communication technology (ICT) sector, where the development of competitive offerings often requires a coalition of platform and service providers. However, the academic literature has yet to propose a systematic managerial tool for the strategic network building process. Our distinctive contribution is the development of a practitioner-oriented process model for building a strategic network, which is linked to the resource-based view and the value creation system approach. Moreover, we suggest that instead of being a sequential stage-wise process, the construction of a strategic network can be divided into parallel, although not necessarily simultaneous, sub-processes based on the required value activities in the entire business concept. The resulting network-building model is used to provide managerial suggestions for the efficient construction of strategic business networks.     

ON THE FUNCTIONAL FORM OF EARNINGS AND STOCK PRICES: INTERNATIONAL EVIDENCE AND IMPLICATIONS FOR THE E/P ANOMALY

This paper examines the functional form of earnings and stock prices on US and Finnish stock markets. Although the functional specification of the components of financial ratios based on purely accounting numbers has received considerable attention, the functional form of earnings and stock prices has not been investigated carefully enough. This investigation is, however, important because of the common use of E/P ratio in financial statement analysis. The empirical evidence provided by this study indicates that the proportional relationship between earnings and stock prices is rejected in both countries. In addition, it is discovered that this deviation from proportionality is a major factor producing the so-called E/P anomaly in these two countries.     

The Impact of Pillar 3 Disclosure Requirements on Bank Safety

We consider the impact of a mandatory information disclosure on bank safety in a spatial model of banking competition, in which a bank’s probability of success depends on the quality of its risk measurement and management systems. Under Basel capital requirements, this quality is at least partially disclosed to market participants by the Pillar 3 disclosures. We show that the regulator can improve the safety of the banking system by tightening the disclosure requirements. Furthermore, the stricter the disclosure requirements are the bigger is a positive impact of an increase in capital requirements on bank safety.     

Reforming Social Security in a Transition Economy: The Case of Lithuania

This paper points out a number of problems associated with the existing pension system in Lithuania. Reforms are proposed, including (i) a substantial increase in the basic pension benefit rate, financed on a pay-as-you-go basis, provided universally, and regulated according to wage/price indexation; (ii) a significant cut in the tax contribution rate to the public pension system matched by a rise in the VAT; (iii) a rise in the retirement age to 65 for both men and women; and (iv) a gradual conversion to a private, funded, mandatory pension system to replace the earnings-related part of the current pension system.     

The international co-movements of Finish stocks

This paper provides new empirical evidence on the international co-movements of Finnish stocks. The vector autoregression (VAR) approach indicates that US and especially Swedish stock markets lead Finnish stock market returns by approximately one or two months. The results based on international market models indicate that the returns of individual Finnish stocks are significantly positively related to those of Sweden, while the relation between Finnish and US returns is significantly lower. The relation seems to vary clearly between industries, some industries being related to US markets as well. Significant time-series instability is reported in the results, however.     

Modelling different types of multilateral co-operation between SMEs

This paper focuses on a theoretical modelling of multilateral SME co-operation. A major part of the previous research has been done on dyadic or bilateral relationships between two partners in a vertical chain although new co-operative ventures increasingly involve multiple partners. The objectives of the paper are to accomplish a conceptualization of different types of multilateral co-operation between SMEs as a synthesis of longitudinal empirical observations and selected theoretical discussions of inter-firm co-operation, to bring out possible advantages and prerequisites of successful co-operation of these types, and to show how co-operation can develop from one basic model to another. The main point in the modelling of SME co-operation is that those who plan, promote or build up co-operative arrangements must know right from the beginning what kind of co-operative model a group of firms will strive for, because the prerequisites of successful co-operation are emphasized differently in different types of co-operation. The empirical examples also suggest that co-operation leads to co-operation, i.e. when a company once joins a net, it is more probable that the company gets access to other nets as well. The basic challenge thus is to get the small or medium-sized company to enter its first co-operative arrangement.     

Social capital in the growth of science-and-technology-based SMEs

There is increasing evidence of the positive role social capital plays in accessing resources and capabilities from and with other actors, and in establishing and maintaining business relationships. Yet, surprisingly little is known about how an organization's social capital and its utilization evolve over time. Focusing on this gap, this paper explores the role of social capital and its structural, relational and cognitive dimensions in the growth of science-and-technology-based SMEs. On the basis of our studies on social capital, entrepreneurial networks and SME growth, we develop a conceptual framework to describe their development through four overlapping phases, each of which involves different managerial tasks: innovation assessment, offering development, commercialization and rapid growth. The results of our longitudinal multiple case studies show that; (i) different types of networks and relationships are important in the transitional periods between the growth phases; and (ii) the role of social capital and its different dimensions varies in developing, maintaining and utilizing these partnerships and network relationships. These findings offer several managerial implications.     

The Normative Analysis of Agricultural Policy: A General Framework and Review

The paper provides a general framework of normative agricultural policy analysis within which it is possible to unify forty years of literature. It is shown that the literature has gone from examining a very small set of simple policies to a much broader set of policies that combine policy instruments simultaneously. In ranking alternative policies agricultural economists have tried to consider distributive equity. While at a glance it may seem that many different methods have been used to consider distributive equity, we show that in general all these methods can be traced back to three alternative methods based on welfarism and Pareto efficiency.