[kand] Kauppakorkeakoulu / BIZ (Open Access)

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    Political partisanship and stock market performance: Evidence from the United Kingdom
    (2024) Mildh, Kaj; Kokkonen, Joni; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    This thesis examines the relationship between the political orientation of the government and stock market performance in the United Kingdom. Using monthly data from 1965 to 2023, I examine how returns and volatility differ under Labour and Conservative governments by running OLS regressions while controlling for business cycle variables. I do not find significant evidence of stock market returns exhibiting a difference in favour of one party over the other. Additionally, I find no significant difference in volatilities between the two parties for the entire sample period, though I find some evidence of volatility being higher during Labour governments for the 1994-2023 period. These findings suggest that the well-documented political premium (Santa-Clara and Valkanov, 2003) does not hold for the United Kingdom.
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    Revisiting (Revitalizing) Momentum
    (2024) Pohjantähti, Pyry; Keloharju, Matti; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    In this thesis, I investigate the impact of varying definitions of cross-sectional momentum on the performance of long-short momentum strategies under different market conditions. A long-short momentum portfolio takes a long position in stocks that have shown strong previous performance and shorts those with poor past performance. Over recent decades, the returns from standard long-short momentum portfolios have declined, prompting both academics and practitioners to explore numerous approaches to diagnose and remedy the issues inherent in these strategies. I construct classical long-short momentum portfolios and investigate simple methods to counteract the diminished returns of these strategies. A notable challenge within momentum strategies is their tendency to "crash"—that is, after a period of significant gains, these portfolios often suffer abrupt, substantial losses. I propose a specific solution to manage these crash risks effectively, conditional on market states. The asset pricing and portfolio management literature offers various complex methods to construct long-short portfolios. However, my objective is to demonstrate that relatively minor improvements can significantly rejuvenate the long-short momentum strategy, also known as the premium anomaly. I discover that techniques such as volatility scaling and adjusting long and short positions based on the market state can significantly enhance the efficacy of the momentum strategy, restoring its former robustness.
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    Idiosyncratic Volatility and Mispricing: Evidence from Europe
    (2024) Laiho, Aki; Keloharju, Matti; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    This thesis studies the cross-section of idiosyncratic volatility and mispricing following the research methodology of Stambaugh et al. (2015). I find statistically significant differences for equal-weighted portfolio alphas across different mispricing and idiosyncratic volatility quintiles. The same findings are not statistically significant for value-weighted portfolios. I do not find proof of the IVOL puzzle of Ang et al. (2006). Sentiment-related changes in the cross-section are also researched, without finding statistically significant differences.
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    Vahingonkorvaus maksuviivästyksen aiheuttamasta vahingosta
    (2024) Uusitalo, Ismo; Hurmerinta-Haanpää, Anna; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    Työn tarkoituksena on tutkia velkojan oikeussuojakeinoja maksuviivästystapauksissa ja jäsentää viivästyskoron ja vahingonkorvauksen välistä suhdetta. Työn tutkimuskysymys on, millä edellytyksillä viivästyskoron ylittävä vahinko voidaan tuomita korvattavaksi maksuviivästyksen seurauksena. Tutkimusmenetelmä on lainopillinen. Tutkimuskysymykseen pyritään vastaamaan kolmen alakysymyksen avulla: (1) Miten viivästyskoron rooli ja tavoitteet jäsentyvät oikeussuojakeinojen järjestelmään? (2) Koskeeko rahavelvoitteita jokin sen luonteesta tai viivästyskoron maksuvelvollisuudesta johtuva erityisnormi, joka rajoittaa sen viivästyksestä aiheutuvan vahingon korvaamista? (3) Millä edellytyksillä vahingonkorvauksen yleiset edellytykset, erityisesti ennakoitavuusvaatimus, täyttyvät rahavelvoitteen viivästyksen yhteydessä? Johtopäätöksiin tultiin seuraavalla tavalla: (1) Viivästyskorolla havaitaan olevan preventio-, reparaatio- ja vastiketavoitteet. Tavoitteellisen ja systemaattisen argumentaation avulla viivästyskoron havaitaan toteuttavan standardisoidun vahingonkorvauksen roolia, jossa reparaatio-ja erityisesti preventiotavoitteet korostuvat. (2) Lainsäädännön, oikeuskäytännön ja oikeuskirjallisuuden avulla tullaan siihen johtopäätökseen, ettei viivästyskoron ylittävän viivästysvahingon korvaaminen ole erityisin normein rajoitettua. (3) Soveltamalla vahingonkorvauksen yleisiä edellytyksiä oikeuskäytäntöä hyödyntäen tullaan johtopäätöksiin, joiden mukaan (a) sopimuksenulkoisten velvoitteiden viivästymisestä aiheutuvaa vahinkoa ei pääsääntöisesti korvata ja (b) muilta osin ratkaisevaksi tulee yleensä ennakoitavuusrajoitus, joka ei rajoita vahingon korvaamista niin mittavasti, kuin kirjallisuudessa on esitetty.
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    Momentum gap and predictability of momentum returns – Evidence from Finland
    (2024) Vaalamo, Veikka; Keloharju, Matti; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    This study examines the predictability of momentum returns utilizing the momentum gap in the Finnish stock market from 2000 to 2024. Employing methodology from Huang (2021), and adjusting it to small market conditions, the thesis explores the association between the momentum gap’s size and momentum returns. It finds that while the momentum gap offers a novel perspective, it does not consistently predict momentum returns in Finland, contrary to results observed in the US market. The research underscores the need for further investigation into momentum strategies in smaller markets like Finland, where market dynamics can differ significantly from larger markets.
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    Three factors affecting bond returns of the Nordic countries
    (2024) Muinonen, Ohto; Kokkonen, Joni; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    The previous research has identified three primary factors accounting for most of the variance in term structures of interest rates, in other words, yield curve shifts. This thesis delves into these factors in the Nordic countries. Using Principal Component Analysis (PCA), it uncovers that the three factors, level, slope, and curvature, explain over 99.5 % of the total variance in interest rates across varied analysis periods in all Nordic countries. The investigation reveals distinct time-varying factor loadings across countries. The findings underline the necessity for estimating factor loadings typical for the ongoing period and country-specific verification to refine yield curve risk measures.
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    The Company Ownership Effect On Risk-Taking
    (2023) Lehtonen, Anton; Pham, Ly; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    This thesis comprehensively covers the research made regarding the effects of ownership structure on company’s risk-taking profile, since it has been shown to be an important factor regarding the decision making and strategic policies of companies. This paper will divide the ownership structure into two different segments to better understand the individual effects that different factors have regarding the risk-taking of firms. And show how different studies measure the risk-taking of companies with different preferences. The current research has not come to a conclusion on the effects of ownership structure and different studies have shown varying results. Because of this I want to explore the different findings and try to better understand the different underlying factors that play a part in the decision-making process of different groups and how they are affected by the change of their equity owned.
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    Key Drivers and Machine Learning in Personalized Mobile Banking - Opportunities and challenges for retail banks
    (2024) Ruuhikorpi, Leevi; Seppälä, Tomi; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    This thesis explores the integration of AI-driven personalization into retail banks' mobile banking services. It investigates the opportunities and challenges arising from this convergence as retail banks seek to fulfil customer expectations for convenience and engagement in the retail financial sector. Consumer expectations for personalized services are on the rise, creating a dynamic where companies must navigate the balance between personalization and cost-effectiveness in the development of mobile banking. To comprehensively analyse this, a broad literature review is chosen as the research method. The findings reveal that AI-powered personalization holds promise in enhancing user engagement but poses challenges related to scalability. Tailoring strategies to the unique needs and preferences of each customer segment is crucial. Transparency, user control and user empowerment are key factors in building trust in AI-driven financial services. In summary, this thesis offers insights into the potential of applying machine learning algorithms to enrich and personalize the mobile banking experience for retail banks, giving insights to retail banks, and researchers alike.
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    Role of Bride Price in Africa: Upholding Child Marriages or Increasing Girls’ Education?
    (2024) Hakola, Anna; Stryjan, Miri; Taloustieteen laitos; Kauppakorkeakoulu; School of Business
    This thesis is a literature review that investigates how a cultural norm, the bride price tradition, is directing people’s economic behavior in Africa. Bride price is a marriage practice where the groom makes a payment to the bride’s family upon marriage, either in the form of money, cattle, or commodities (Nyyssölä 2022). More specifically, this thesis investigates how bride price links to child marriage and women’s education. Findings include that bride price appears to encourage parents to send their daughters to marriage early, as a way to smooth consumption under poverty (Corno and Voena 2023, Corno et. al 2020). On the other hand, bride price increases in a woman’s education, therefore incentivizing parents to educate girls (Ashraf et. al 2020). Alternative methods for parents to smooth consumption and incentivizing girls’ education are discussed. These methods include microfinance and conditional and unconditional cash transfer programs. From this discussion, it is concluded that microfinance holds potential to provide families with enough means to educate their daughters and thus prevent child marriage (Abdullah et. al 2015). When a cash transfer program is conditional on a girl’s education, it appears to improve girls’ schooling rates (Baird 2011).
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    United States’ Impact in Stock Return Predictability in the Scandinavian Markets
    (2023) Raij, Sampo; Lof, Matthijs; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    I examine whether lagged US excess returns have had a predictive relationship with excess returns in Sweden, Denmark and Norway from 1996 to 2020. I divide the time frame into three separate groups to see how the potential lead-lag-effect has developed over time. Over the entire 25-year time period, there were no statistically significant effects. However, from Jan 2001 to Dec 2010, the US Granger caused Danish stock market excess returns on statistically highly significant level. I was unable to determine whether the predictive relationship has weakened over time, though continuously smaller R2-values would seem to support this theory. The results indicate that if the US hasn’t had predictive power over the Scandinavian markets since 2010, and that the predictive strength would seem to be at its highest in times of market shocks originating from the US, implying that the prior predictive relationship stemmed from gradual information diffusion from the US to Scandinavia.
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    Exploring the challenges in international buyer-supplier relationships in the Japanese tea industry
    (2024) Kauppila, Sara; Hekkala, Riitta; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    The abroad market for Japanese tea has opportunities but also many challenges. This paper focuses on exploring the challenges small to medium Japanese tea producers and tea retailers outside of Japan experience in their buyer-supplier relationships with each other. The goal of the research is to analyse the challenges and their impact on the two parties. The challenges in the buyer-supplier relationship are explored through interviews that bring out the perspectives of both parties. This research finds that the most significant challenges are the cost and complexity of shipping and regulations, the language barrier, and finding a level of pricing that makes the relationship viable for both parties. As a result of these challenges, it is concluded that organisations that deem themselves well-equipped to handle these challenges can benefit from entering these international buyer-supplier relationships. However, for organisations not equipped to face the challenges, these buyer-supplier relationships are likely to pose too high of a risk.
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    The Role of Management Control Systems in Fostering Innovation
    (2024) Sjöholm, Jessika; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    Sjöholmin kandidaatintutkielma käsittelee johdon ohjausjärjestelmien roolia innovaation edistämisessä teorian ja empiirisen case-tutkimuksen kautta. Viime vuosikymmenten tutkimus johdon ohjausjärjestelmistä osoittaa, että järjestelmät sekä rajoittavat että edistävät innovaatiota ja innovatiivisuutta. Sjöholmin tutkielma tukee tätä käsitystä ohjausjärjestelmien erilaisista vaikutuksista, ja tuo käytännön näkökulman järjestelmien eri käyttötavoista ja niiden tasapainottamisesta suomalaisessa teollisuusyrityksessä.
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    Effects of Sustainability Reporting on Environmental Performance: Analysing the Corporate Sustainability Reporting Directive
    (2023) Saari, Oona; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    This thesis is a literature review on the impacts of sustainability reporting on companies’ environmental performance. With the introduction of the EU’s new Corporate Sustainability Reporting Directive, the most comprehensive sustainability reporting framework so far, reporting is becoming mandatory for the majority of European businesses in the near future. This study seeks to understand the relation between reporting on environmental sustainability and whether it drives companies towards more sustainable business practices. The expected impacts of the new directive are found through a literature review on previous reporting frameworks, most importantly the EU’s previous Non-Financial Reporting Directive. While the results on earlier reporting requirements are somewhat mixed, the new directive, being much more detailed than its predecessors, can be seen as a promising tool towards a more sustainable future. Some mechanisms creating the impacts are consumer pressure, the green bullwhip effect, and the development of internal processes in order to comply with the reporting requirements.
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    Sustainability Challenges In The Second-Hand clothing Supply Chain: Traceability Issue, Environmental Consequences And Local Community, Manufacturing & Economy
    (2023) Vuorenkoski, Jaakko; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    The global rise in clothing consumption has led to environmental and socio-economic challenges, with the second-hand clothing market rising as a sustainable alternative. This thesis explores the complexities of the second-hand clothing supply chain (SHCSC), focusing on its global dynamics, environmental impacts, and socio-economic ramifications. It examines the environmental and health hazards associated with second-hand clothing, analyzes the impacts of the SHCSC on local manufacturing, economies, and communities. This thesis also explores the political reality of clothing destination countries and examines options and recommendations regarding the issues. Lastly it considers chain liability issues and eyes the possibilities of traceability in the supply chain.
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    Navigating the Belt and Road Initiative: Implications on Partner Countries and In-ternational Relations
    (2023) Pettinen, Wilhelmina; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    The global supply chains are evolving rapidly and China’s state-of-the-art initiative, the BRI is a project of unprecedented financial and geographical scale. It seeks to connect Asia, Europe, and Africa to a unified trading network by investing in new infrastructure and integrating financial systems. This study focuses on the implications of the Belt and Road Initiative on three case countries. The research investigates what benefits or challenges the initiative poses to the BRI countries and what governments should consider before taking part in the initiative. Furthermore, the thesis provides a brief overview of the current global political situation and how political shifts may affect the Belt and Road initiative. The study contributes to the current understanding of the BRI and provides a unique perspective on global supply chains.
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    Non-Conscious Data Collection
    (2023) Matomäki, Sofia; Seppälä, Tomi; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    This literature review explores the issues and risks in non-conscious data collection and evaluates people’s attitudes towards it. In the modern world, data is one of the most valuable resources, yet studies focused on the potential negative implications of the new data-driven technologies are lacking. Therefore, this thesis conducts a comprehensive literature review to identify and assess risks in non-conscious data collection technologies that are most relevant and referenced in current literature. Accordingly, the most prominent risks are related to privacy issues with personal data, bias in algorithms creating inequality, and the difficulties in creating adequate legislation. Subsequently, the thesis will explore existing studies about people’s attitudes towards non-conscious data collection and examine the most significant socio-demographic determinants of those attitudes. Therefore, despite socio-demographic factors such as age, gender, and economic status affecting the attitudes people have towards data collection technologies, this thesis argues how these approaches can be explained by varying external factors such as prior experiences with similar technologies.
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    Investigation of Non-Financial Measures in a Customer-centric Organization
    (2023) Felton, Timmy; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    The purpose of this thesis is to explore the use of non-financial performance measures in the context of a Finnish consumer-electronics retailer that has a strong emphasis on customer-centricity in its strategy. The qualitative case study focuses on how non-financial measures are implemented in the target organization while using the Balanced Scorecard (Kaplan & Norton, 1992) as a theoretical reference. Additionally, the study investigates the role of non-financial measurement in the relations between different groups such as financial management and store-level sales management, drawing upon the concepts in a paper by Vaivio (1999) “Examining the Quantified Customer”. It is found that while a non-financial measure such as customer satisfaction is a central part of the oranization’s strategy, its role in driving financial performance is not clearly defined. The focus on customer satisfaction in itself without a clear link to financial benefits, indicates a potential area for further development. The lack of critical discussion between financial and sales management suggests that customer-related non-financial measures are possibly not utilized to their full potential. The study serves as a call for further research on the utilization of customer-related performance measures, namely customer satisfaction, in similar contexts.
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    The Use of Artificial Intelligence in Dynamic Pricing Strategies
    (2023) Markula, Aleksi; Movarrei, Reza; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    Pricing strategies can have a large impact on the success of a company. This literature review focuses on the advantages and disadvantages of using artificial intelligence in dynamic pricing strategies. Having a good comprehension of the possible benefits and challenges will help companies to understand the effects of the chosen pricing strategies. AI-driven Dynamic pricing has great opportunities to increase the profits of a firm. Firms can benefit from things such as personalized pricing based on per-sonal behaviour and characteristics as well as cost reductions by improving efficiency and reducing the need for manual work and using automation. AI-assisted dynamic prizing can however have a negative effect on the customers perception of trust, feeling of fairness and transparency. The negative effects can have short- and long-term effects for companies. Also, ethical issues of privacy and equality can arise as price discrimination is used. It’s equally as important to understand the businesses and the customers perspective of the pricing strategy as one can’t exist without the other. This research will consider both sides of the equation. The literature review will provide a comprehensive overview of the main advantages and disadvantages of an AI-assisted dynamic pricing strategy. The focus of this research will be in the e-commerce, hotel, and transportation industries.
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    Blockchain applications in the space industry: focus on space debris management and space governance
    (2023) Westerlund, Paul; Seppälä, Tomi; Tieto- ja palvelujohtamisen laitos; Kauppakorkeakoulu; School of Business
    As humanity continues to expand its efforts in outer space exploration and the number of satellite launches is growing rapidly, issues related to space debris management and space governance emerge. To conduct space activities sustainably, these problems should be solved before they turn into larger complications. To assess these issues, this paper examines the challenges that space governance and space debris management currently faces and whether or not these challenges could be solved through blockchain technology. As the thesis is conducted as a literature review, the findings of this paper are built upon existing literature in the aforementioned areas of the space industry. The challenges examined in this thesis, such as those related to the effective monitoring of space debris locations, have been identified as issues that could be addressed through the application of blockchain technology. Through the use of smart contracts, processes that would normally require human interaction could be automated to be carried out efficiently in space by unmanned spacecraft.
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    Sensemaking and Strategic Decisions: The Role of Management Accountants
    (2023) Vainionpää, Jutta; Vaivio, Juhani; Laskentatoimen laitos; Kauppakorkeakoulu; School of Business
    This study provides insights into the emerging role of management accountants by exploring the role of management accountants in strategic management. The study relies on the core phenomenon of sensemaking. The theory of this study is drawn from the theoretical framework for sensemaking developed by Tillmann and Goddard (2008). The study shows that the business controllers in the case company undertake sensemaking activities to understand and to help management understand the strategic complexities better. Strategic decision-making was found to involve a certain amount of uncertainty and ambiguity. Sensemaking provides a conceptual framework for examining decision-making under these circumstances (Vaara, 2003). Thus, relying on sensemaking provides insights into the contribution of management accounting to strategic decisions. A single-case study approach allowed the exploration of social dynamics surrounding strategic decision-making. Accounting information can be seen as an essential tool for sense-making as it not only mirrors but also converts organizational reality (Roberts and Scapens, 1985) and thus can contribute to relevant insights into the sense-making process of management (Puhakka, 2017). Through sensemaking activities management accountants seem to increase an understanding of the issue being addressed in organizations, especially on strategic matters.