Browsing by Author "Korpua, Niko"

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The Impact of Venture Capital Reputation on Portfolio Company Post-IPO Performance under Economic Uncertainty
(2016) Korpua, Niko
School of Business | Bachelor's thesis
I study the interaction of venture capital reputation and stock market volatility, and their relation together on portfolio company post-initial public offering long-run performance in the US 1990-2015. Krishnan et. al. (2011) have shown that venture capital reputation, which is acquired by successful past venture activity, has a positive significant relation to several long-run post-IPO performance measures of portfolio companies in the US. My findings indicate that VC reputation predicts post-IPO performance only during volatile performance years.
Pass-through in estimating the market power of electricity retailers in Finland
(2020) Korpua, Niko
School of Business | Master's thesis
Abstract I estimate the pass-through rate of distribution charge and electricity tax into the total consumer facing price of electricity, which is determined as the sum of electricity retail price, distribution charge, electricity tax and VAT. Pass-through rates falling between zero and unity suggest perfect competition, while overshooting raises concerns of market power. I have monthly obligatory supply prices, distribution charges, electricity tax and VAT from Energy Authority for all the 66 obligatory suppliers and 86 distribution system operators that operated in Finland 2006 – 2011. Each of the distribution areas have an assigned obligatory supplier that must provide electricity to consumers for public list prices. The obligatory supply prices are in practice the cheapest standard contract prices offered by retailers, and therefore I argue they serve as a proxy for the retail offer prices. During 2006-2011 95% of all the contracts offered to the market were these standard contract prices. The data quality is concerning especially for obligatory supply prices, as they have more variation than earlier research has found. I solve this issue by annualising the data by choosing each price prevailing in December, which is the month that includes the least amount of changes. This reduces the accuracy and statistical power of estimates, especially in the heterogenous part of the estimation, and reduces information on timing of the changes. I find pass-through rates of 1.11, 0.94 and 1.38 for the sample on aggregate, for nationwide sellers, and for retailers who only sell locally. I use fixed effects estimator. None of the confidence intervals implicate overshooting at 95 % confidence level. The pass-through for local retailers comes closest with a CI of (0.97, 1.97). I find that in total three local retailers and six nationwide retailers have pass-throughs exceeding unity, i.e. overshooting. The heterogenous effects are very sensitive to the assumptions made in the model and any measurement error. The pass-through rate of 1.11 implies that the electricity prices on average increased an additional 5 % 2006 - 2011 due to overshooting, while the total electricity bill became 0.4 % more expensive per consumer, the corresponding upper bounds for heterogenous effects are 28 % and 2.2%. The largest caveats of this study are that I do observe only list prices rather than actual paid prices, this likely causes an upward bias to the estimates. It also remains unclear how effectively annualising the data deals with the data quality issues, and on the other hand how much information is lost due to annualization. I have only six observations per retailer to estimate heterogenous effects. I conclude that these results cannot be interpreted as evidence of the existence of market power in the Finnish electricity retail market. This might be enough to raise interest of Energy Authority to conduct a similar study with more recent and complete data to investigate the issue further. If similar results were to arise a possible policy response could be to launch an information campaign to raise awareness of the opportunity to change supplier for free of charge, choose any supplier from the whole country, and how to do it cost-effectively as a consumer.