[article-cris] Kauppakorkeakoulu / BIZ

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    Identifying accounting conservatism in the presence of skewness
    (Springer, 2024-02) Jarva, Henry; Lof, Matthijs; Hanken School of Economics; Department of Finance; Department of Finance
    The asymmetric timeliness (AT) coefficient as a measure of accounting conservatism has been subject to much debate. We clarify the conditions under which the AT coefficient identifies accounting conservatism in the presence of skewness. Specifically, using an extensive simulation-based approach, we examine the joint impact of return skewness, earnings skewness, and return endogeneity. We show that skewness of returns and earnings distorts the AT coefficient as a measure of conservatism when returns are endogenous. While earnings skewness is a predicted consequence of conditional conservatism, return skewness is arguably unrelated to conservative reporting and cannot be tackled by simple skew reducing transformations or outlier-robust estimators. Empirically, we analyze AT and skewness of firms sorted on size and MTB, highlighting the importance of constant skewness across groups for accurate comparisons of accounting conservatism.
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    Networks of internationalizing digital platforms in physical place and digital space
    (John Wiley & Sons, 2023-11) Galkina, Tamara; Atkova, Irina; Ciulli, Francesca; Department of Management Studies; University of Oulu; Tilburg University; Department of Management Studies
    Research Summary: The existing literature provides contradictory evidence on how digital platform firms establish network relations for internationalization. Some studies argue that they all but obviate the need for traditional relations in physical places. Others argue that these firms can suffer from overreliance on online interactions in digital space. We examine the coexistence of the network relations of international digital platform firms in physical place and digital space. Our multiple-case study identifies three coexistence mechanisms: reinforcement, separation, and simulation. These mechanisms are conditioned by three respective modes of bordering between physical place and digital space: soldering, interosculation, and division. We contribute to the network approach to internationalization and formulate implications for the concepts of location and borders in international business. Managerial Summary: International digital platform firms establish traditional network relations in physical places and rely heavily on online interactions in digital space. However, how do they combine their networking activities in these two localities? We examine the coexistence of the network relations of international digital platform firms in physical place and digital space and identify three coexistence mechanisms: reinforcement, separation, and simulation. These mechanisms are conditioned by three respective modes of bordering between physical place and digital space: soldering, interosculation, and division. We show that international platform companies, despite being digital in nature, are well advised to pay attention to not only digital but also actual physical networking, and that they come to see these as mutually nurturing.
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    Direct Lending Returns
    (CFA Institute, 2024) Suhonen, Antti; Department of Finance; Department of Finance
    I examine the performance of US business development companies (“BDC”). BDCs have produced returns in line with those of private funds engaged in direct lending. Leveraged loan and small-cap value equity returns explain a significant part of BDC performance, and the alpha of BDCs is zero on a market-value basis but a statistically significant 2.74% per annum based on net asset value (NAV) valuations. I find no evidence of an illiquidity premium, which suggests that the alpha could result from regulatory arbitrage or a peso problem. Cross-sectional BDC returns are widely dispersed and exhibit strong persistence in top- and bottom-quartile manager performance.
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    Confessions of an Antinatalist Philosopher
    (Cambridge University Press, 2024-01-02) Häyry, Matti; Department of Management Studies; Department of Management Studies
    Antinatalism assigns reproduction a negative value. There should be fewer or no births. Those who say that there should be fewer births have been called conditional antinatalists. A better name for their view would be selective pronatalism. Those who say that there should be no births face two challenges. They must define the scope of their no-birth policy. Does it apply only to human or sentient beings or can it also be extended to all organic life, perhaps even to machine consciousness? And whatever the scope, they have to justify the eventual extinction of humankind or other life forms, an inevitable consequence of unconditional antinatalism. Different axiologies and moral theories produce different responses to these challenges. It is argued that a two-value conflict-sensitive negative utilitarianism would produce a kind and reasonable justification for ending at least human and factory-animal reproduction. The conclusion is purely moral and supports only voluntary extinction for humankind.
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    If You Must Give Them a Gift, Then Give Them the Gift of Nonexistence
    (Cambridge University Press, 2024-01) Häyry, Matti; Department of Management Studies; Department of Management Studies
    I present a qualified new defense of antinatalism. It is intended to empower potential parents who worry about their possible children’s life quality in a world threatened by environmental degradation, climate change, and the like. The main elements of the defense are an understanding of antinatalism’s historical nature and contemporary varieties, a positional theory of value based on Epicurean hedonism and Schopenhauerian pessimism, and a sensitive guide for reproductive decision-making in the light of different views on life’s value and risk-taking. My conclusion, main message, to the concerned would-be parents is threefold. If they believe that life’s ordinary frustrations can make it not worth living, they should not have children. If they believe that a noticeably low life quality makes it not worth living and that such life quality can be reasonably expected, they should not have children, either. If they believe that a noticeably low life quality is not reasonably to be expected or that the risk is worth taking, they can, in the light of their own values and beliefs, have children. The conclusion is supported by a combination of the extant arguments for reproductive abstinence, namely the arguments from consent, moral asymmetry, life quality, and risk.
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    Regulating women's pay in Finland and the UK - the role of the public sector
    (2023-05-26) Conley, Hazel; Koskinen Sandberg, Paula; Department of Management Studies; Department of Management Studies; Conley, Hazel; Koskinen Sandberg, Paula
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    Liminality and developmental process of learning advantage of newness of early internationalizing firms
    (Elsevier Science B.V., 2023-12) Appiah, Emmanuel Kusi; Galkina, Tamara; Gabrielsson, Peter; University of Vaasa; Department of Management Studies; Department of Management Studies
    Extant internationalization studies have devoted limited attention to the dynamics of the learning advantage of newness (LAN), which we, in response, investigate through the process approach and the novel lens of the concept of liminality. We conduct a longitudinal multiple-case study of five Finnish internationalizing firms. We inductively derive a process model that shows how the underlying liminal factors, such as international opportunity scaffolding activities, learning from communitas, and rituals, contribute to the development of learning advantage of newness. Originating in anthropology, the liminality perspective offers a novel perspective on LAN of early internationalizing firms. We also provide directions for future research and recommendations for practitioners.
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    Introduction to the Handbook on Gender and Public Sector Employment
    (2023-05-26) Conley, Hazel; Koskinen Sandberg, Paula; Department of Management Studies; Department of Management Studies; Conley, Hazel; Koskinen Sandberg, Paula
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    Degrowth and the circular economy: Reflecting on the depth of business circularity
    (Elsevier Science Ltd., 2023-08-15) Nesterova, Iana; Buch-Hansen, Hubert; Department of Management Studies; Roskilde University; Department of Management Studies
    Discussions about the circular economy have taken place in parallel with, but largely independently of, discussions about degrowth. The present paper brings into dialogue the two fields by contemplating what circularity in business could entail in the context of transformations towards degrowth societies. To this end, the paper relates to a recent, holistic reconceptualisation which views degrowth transformations in terms of both less and more on four planes of social being: material transactions with nature, social interactions between people, social structures and people's inner being. These planes signify depth of social being. The paper looks at business through the lens of this reconceptualisation before zooming in on circularity as an important manifestation of a sustainability practice in business. We argue that, in the context of degrowth, implementation of circularity as a principle and a practice should be deep. Relating circularity to each plane of social being, we focus particularly on the plane of people's inner being, the reason being that our mode of relating with the world would need to be significantly different to what it currently is, if deep circularity practices are to become more widespread.
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    MNE–civil society interactions: a systematic review and research agenda
    (Palgrave Macmillan, 2023-11-23) Bruijn, Kayleigh; Georgallis, Panikos; Albino-Pimentel, João; Kourula, Arno; Teegen, Hildy; University of Amsterdam; University of South Carolina; School Services, BIZ
    Multinational enterprises (MNEs) and civil society (CS) interact in many ways across countries, with significant implications for these actors and for broader society. We review 166 studies of MNE–CS interactions in international business, general management, business and society, political science, sociology, and specialized non-profit journals over three decades. We synthesize this large and fragmented literature to characterize the nature (cooperation or conflict) and context (geography, industry, and issue) of MNE–CS interactions and uncover their antecedents, outcomes, and moderators. Our review reveals important blind spots in our understanding of the antecedents and outcomes of MNE–CS interactions and uncovers substantial discrepancy between the contexts of real-world MNE–CS interactions and the contexts examined in the literature. We propose actionable recommendations to (i) better indicate and expand the contexts where MNE–CS interactions are studied; (ii) enrich understanding of the antecedents of MNE–CS interactions by leveraging institutional and cultural perspectives; (iii) reorient research on the outcomes of MNE–CS interactions by examining the temporal dynamics of MNE learning and legitimacy, and (iv) emphasize societal relevance as reflected, for example, in green capabilities and moral markets. We hope this review will inspire new inter-disciplinary perspectives on MNE–CS interactions and inform research addressing urgent societal challenges.
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    Life events as an approach for service ecosystem design: lessons learned from the Finnish public services
    (Linköping University, 2023-11-28) Solsona Caba, Nuria; Turunen, Taija; Department of Design; Department of Management Studies
    Life event services have emerged worldwide as an approach for designing public services by addressing significant transitions in life and building an ecosystem around them. We study this approach as an opportunity to engage the ecosystem in a novel manner. Empirically, we investigated three digital public service cases in Finland that leverage the life events approach. Life transitions make gaps between systems visible to the large and complex network of value-creators. Life events is a unifying term for public administrations, cross-sector organisations, and communities involved as providers. Whilst this approach uncovers an underserved set of actors and situational motivations, it provides the service ecosystem with a shared purpose. Our analysis establishes four demands for designing service ecosystems around life transitions: semantic interoperability, ecosystem governance, segmentation model and purpose-driven approach.
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    Pääoma työn tuottavuuden kasvun lähteenä – Suomi kansainvälisessä vertailussa
    (Taloustieteellinen Yhdistys, 2023-10-09) Pohjola, Matti; Department of Economics; Department of Economics
    Osoitan 13 OECD-maata kattavassa ja pääoman endogeenisuuden huomioon ottavassa tarkastelussa, että pääoman laatu oli määrää tärkeämpi työn tuottavuuden kasvun lähde ajanjaksolla 1985–2021. Suomessa laadun kontribuutio oli maaryhmän pienin, Ruotsissa puolestaan suurin. Suomi on lisäksi ainoa maa, jossa pääoman laatu heikkeni 2010-luvulla, mikä osaltaan selittää maamme heikkoa kasvumenestystä finanssikriisin jälkeisellä ajanjaksolla. Suomessa on investoitu enemmän asuin- ja muihin rakennuksiin, Ruotsissa puolestaan tuottavuuden kasvun kannalta tärkeämpiin varoihin: ICT-laitteisiin, ohjelmistoihin ja tietokantoihin sekä tutkimukseen ja kehittämiseen. Investointien tarpeellisuutta korostavaa talouspolitiikkaa olisikin meillä syytä täsmentää nostamalla investointien laatu kasvupolitiikan keskiöön. Asia on nyt entistäkin ajankohtaisempi, kun vihreän siirtymän tiedetään vaativan suuria investointeja tulevaisuudessa
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    Greed is good? Of equilibrium impacts in environmental regulation
    (Academic Press, 2023-10) Vehviläinen, Iivo; Department of Economics
    This paper presents a novel method to quantify the market equilibrium impacts of tighter environmental policies. The approach is taken to evaluate the welfare effects of emerging environmental regulations to protect the biodiversity of river ecosystems that put pressure on reducing hydropower generation capacity. A dataset of 129 million bids in the Nordic electricity market is used to calculate how small reductions in hydropower capacity change market outcomes and surpluses hour-by-hour for the years 2011–2022. Reaching the EU Biodiversity Strategy target of 2030 is estimated to reduce 56 MW of hydropower capacity in Finland. Such a change would lead to quantifiable welfare losses of €62 million over time, not counting environmental benefits. Notably, the producer surplus increases by €318 million over time through electricity market price changes, suggesting that instead of lobbying against biodiversity enhancing regulation, agreeing to an industry-wide implementation could benefit both the environment and the firms. Yet the fact that consumer costs increase more than the mere implementation cost reads as a sign of caution when tighter biodiversity policies are introduced.
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    Gender-ethnicity intersectional variation in work–family dynamics : Family interference with work, guilt, and job satisfaction
    (John Wiley & Sons, 2023-11-01) Hwang, Seonyoung; Hoque, Kim; Department of Management Studies; King's College London
    Although guilt is often considered the most prevalent emotional outcome of work–family conflict (WFC), most work–family research focuses on family-related guilt stemming from work interference with family, rather than job-related guilt stemming from family interference with work (FIW). In addition, there is little understanding of how different employee social groups experience the implications of FIW in their daily lives. To address these research gaps, this study explores the relationship between daily FIW and job-related guilt, and its subsequent impact on job satisfaction. It also investigates variation in these relationships by (1) gender and (2) the intersection of gender and ethnicity. Bayesian multilevel structural equation modeling using data from 5-day diary surveys from 210 solicitors in Britain shows daily FIW is associated with higher job-related guilt and subsequently lower job satisfaction. The relationship is stronger for women than men in general, but is also stronger for South Asian women than white British women (and men), and for South Asian men than white British men. This suggests that studies focusing on single social group characteristics (e.g., gender) are likely to obscure intersectional effects that might produce significant within-group variation. The findings also highlight the importance of integrating workplace inequality arguments into theorization of WFC.
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    The interview and researching collective memory
    (2023-07-14) Rintamäki, Jukka; Mena, Sébastien; Foster, William M.; Zundel, Mike; Department of Management Studies; Hertie School of Governance; University of Alberta; University of Liverpool
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    Procreative Generosity: Why We Should Not Have Children
    (MDPI AG, 2023-10-16) Häyry, Matti; Department of Management Studies; Department of Management Studies
    We should not have children because (i) we have no child-regarding reasons to do so, (ii) we have child-regarding reasons not to do so, and (iii) although we have other-regarding reasons to do so, these reasons are not decisive. Objections to (i) include that life is always good and that possible individuals would choose life if given the opportunity. These fail if there is no duty to create even a good life (the argument from asymmetry), all lives are bad (the argument from quality of life), and potential parents are not entitled to produce lives without the permission of the offspring (the argument from assumed consent). The failure of the objections is not, however, self-evidently inevitable if a hedonistic axiology is used. It becomes inevitable with a switch to an autonomy-respecting, need-based theory of value. There is no need to become existent (i), and there is a need to avoid frustration, pain, and suffering once an individual has been brought into existence (ii). Since any life can be or turn out to be very bad, potential parents put their children in harm’s way by creating them (the argument from risk). To see this and to see how the preferences of the potential parents do not change the situation (iii), it is necessary to assume a concept of gambling that allows genuinely serious harm in case the player loses.
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    Customer Liquidity Provision: Implications for Corporate Bond Transaction Costs
    (Institute for Operations Research and the Management Sciences (INFORMS), 2024-01) Choi, Jaewon; Huh, Yesol; Shin, Sean; University of Illinois at Urbana-Champaign; Federal Reserve Board; Department of Finance
    The convention when calculating corporate bond trading costs is to estimate bid–ask spreads that customers pay, implicitly assuming that dealers always provide liquidity to customers. We show that, contrary to this assumption, customers increasingly provide liquidity following the adoption of post-2008 banking regulations, and thus, conventional bid–ask spread measures underestimate the cost of dealers’ liquidity provision. Among large trades wherein dealers use inventory capacity, customers pay 40%–60% wider spreads than before the crisis. Customers’ balance-sheet capacity and their trading relationships with dealers are important determinants of customer liquidity provision.
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    Racial Segregation in Housing Markets and the Erosion of Black Wealth
    (MIT Press, 2022-11-15) Akbar, Prottoy; Hickly, Sijie Li; Shertzer, Allison; Walsh, Randall P.; Department of Economics; Freddie Mac; University of Pittsburgh; Department of Economics
    This paper studies how the expansion of segregated neighborhoods eroded black wealth in prewar American cities. Using a novel sample of matched addresses, we find that over a single decade rental prices soared by roughly 50 percent on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28 percent premium to buy a home on a majority white block, after which their homes lost 10 percent of their value. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with moving north during the Great Migration.
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    COVID-19 and labour market outcomes by gender in Finland
    (2022) Huttunen, Kristiina; Pesola, Hanna; Department of Economics; VATT Institute for Economic Research; Department of Economics; Flam, Harry; Nordström Skans, Oskar
    This paper presents evidence of the immediate labour market effects of the COVID-19 pandemic by gender, using Finnish daily administrative data. We document that employment reductions during the COVID-19 pandemic were more pronounced in female-dominated industries. However, other industries that weathered the pandemic particularly well also have high proportions of female employees, leading to an attenuated aggregate impact. We also document substantial earnings losses among workers who lost their jobs during the pandemic. These losses are relatively similar between genders. We do not find that earnings losses were more pronounced for women with children than for those without, indicating that childcare responsibilities did not exacerbate the costs of job losses during the pandemic.
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    A fifth wheel? : Local language skills and work-related outcomes among foreign employees
    (Routledge, 2023) Koveshnikov, Alexei; Björkman, Ingmar; Kähäri, Perttu; Department of Management Studies; Hanken School of Economics
    Drawing on person-job fit theory, we theorize and empirically analyze the effects of host country language skills on two work-related outcomes: workplace social support and perceived overqualification. We further examine how these outcomes are related with job satisfaction. Empirically, we analyze these relationships using data from three sub-studies of foreign academics in the Nordic region. The first is a survey filled in by 496 foreign academics working at 18 universities in Finland, Sweden, and Norway. The second is an interview study of 41 foreign academics employed by a large international university in Finland. The third consists of nine interviews across Finland, Sweden, and Norway where we followed up on the analysis of the data from the first two sub-studies. Whilst we use the quantitative dataset to test our hypotheses, our qualitative data allows us to dig deeper into how making investments in local language skills does not necessary lead to positive work-related outcomes as perceived by foreign academics, and what HR implications these perceptions have for international organizations, such as universities. Overall, our findings provide important insights into the complex and contextual nature of host country language skills’ role and effects in international organizations.