Search results

While the ICT industry as a whole is undergoing a potentially disruptive phase of development due to the convergence between information and telecom technologies and the rapid diffusion of internet‐related applications. Against this background the purpose of the paper is to analyse recent patterns of internal/indigenous and external diversification of prominent Finnish telecom firms using data on patents and strategic R&D alliances.

The methodology comprises of statistical analyses of patterns of patenting of Finnish telecom firms to capture the internal/indigenous nature of diversification, compared with patterns of external diversification based on a new database of alliances of Finnish firms.

The results indicate that the Finnish telecom industry has diversified its technological base in recent years. The industry appears internally/indigenously weak in internet‐related “new” telecom technologies and related applications. However, telecom firms have also extensively engaged themselves in complementary R&D alliances in these fields.

The paper carries important implications for policymakers and managers alike related to the sustainability of previous success of Finnish telecom. Limitation related to the use of Finnish patent data that might to capture software technologies sufficiently, and does not aim to/cannot capture the diversified technological competencies of Nokia on a global level.

The originality of the paper lies in the combination of patent and R&D alliances data, as well as the development of a concordance table to link technology classes to broader developments in the industry, for a novel and systematic analysis of the responsiveness of the Finnish telecom industry to ICT convergence

In explaining international expansion and performance, the traditional explanation in international business literature has mainly offered country, and firm-level structural explanations for performance. Moreover, this literature has been biased toward larger, established multinational manufacturing companies (Dunning, 1958; Hymer, 1960; Aharoni, 1966; Vernon, 1966). This was understandable as, for much of the 20th century, manufacturing occupied the dominant share of the economy. However, by the early 1960s, the service sector already accounted for more than half of the domestic economic activity in developed nations. Today, even in international operations, the share of services is rapidly increasing. For example, the share of services in U.S. exports in 1997 had grown to 27%, and to 16% in U.S. imports (Contractor, 1999). Moreover, in sectors such as information technology, telecommunications or biotechnology, recent years have seen a proliferation of entrepreneurial start-up companies, where the characteristics of their founders and leaders appear to have as much, or greater, impact on performance, as traditional firm-level explanations. Since the late 1980s, the growth of venture capital markets and rise in entrepreneurship have been observed in technology-driven industries (The Economist, 1993; Gupta, 1989; Mamis, 1989). Could entrepreneurial and leadership factors assume greater importance in explaining performance, especially international performance, of younger companies in such sectors? This is the broad hypothesis pursued in this study.

This paper aims to analyze the roles that African suppliers play in global value chains and the strategies that foreign firms adopt to integrate African firms into their supply chains.

The empirical research of this paper is based on a multiple case study and on interview data of foreign buyers and their entry into African supply markets: five Finnish companies and five Chinese companies were interviewed in 2014-2015.

The authors find that Finnish firms make relatively small investments and start sourcing operations on a small scale, whereas Chinese firms are running large infrastructural projects, relying on local sourcing. African firms typically only play modest roles with little value capture in the chain, supplying raw materials and simple products. The African infrastructural and cultural context makes it challenging for foreign firms to provide local suppliers with more strategic roles in their chains, thus hindering integration of local firms into global value chains.

This paper is one of the first to offer a comparison of Finnish (Western) and Chinese (other emerging economy) firms’ sourcing from Africa and provides understanding of the role of African suppliers in current value chains. The authors offer a qualitative exploration of why companies invest in African suppliers and of the scope of African presence in global value chains.

The purpose of this paper is to analyse investment strategies and performance of Finnish firms in their international joint ventures (IJVs) established in Baltic States.

The paper analyse performance of IJVs in Baltic States based on the IJV theory, international business literature, and foreign direct investments in Central and Eastern Europe (CEE) literature. The analysed factors include firm, investment, and inter-partner relationship-specific factors. To examine the propositions the paper used ten IJVs established by Finnish firms in various Baltic States between the period 1991 and 2005.

The results show that the level of uncertainties in the countries and the differences between partners are not related to firms’ commitments and the entry mode choice. Several Finnish firms preferred cost leadership to compete with other firms in the local markets. In most cases there was a positive relationship between the level of partners’ equity share, commitment to the IJV, and the level of trust between partners. The results indicated differences in the IJV performance depending on parent firms’ objectives, their competitive strategies, mode of entry, age of IJVs, control strategies, level of trust, and commitment between partners, as well as depending on the performance measures used.

This study suggests four observations that managers may need to take into consideration to improve IJV performance in the Baltic States. First, cost leadership strategy help to increase IJV performance in terms of sales. Second, social control mechanisms and narrow control leaded to better performance than formal and wide control. Third, minority ownership by Finnish firms in IJVs leaded to better performance based on sales, productivity and total performance whereas majority ownership had leaded to better performance in terms of total costs. Finally, the results confirmed that commitment to the IJV operation and trust on the other partner are very essential factors to IJV performance.

The study is the first one to analyse in more detail based on several cases the IJV strategies and performance of Finnish firms in the Baltic States. The analysed factors include several such factors which have not been analysed related to IJV operations in Baltic States (some also limitedly in the CEE context).

The purpose of this paper is to examine how entrepreneurship culture affects start-up and venture capital co-evolution during the early evolution of an entrepreneurial ecosystem (EE) and its ability to foster the emergence of ambitious entrepreneurship as an outcome of its activity. Unlike studies that capture entrepreneurship culture at the national level, this study focusses specifically on the culture of venture capital-financed entrepreneurship and understanding its implications to the development of venture capital markets and successful firm-level outcomes within ecosystems.

Relying on EE and organisational imprinting theory, this study specifies characteristics of venture capital-financed entrepreneurship of Silicon Valley to illustrate the American way of building start-ups and examine whether they have as imprints affected to the entrepreneurship culture and start-up and venture capital co-evolution in Finland during the early evolution of its EE between 1980 and 1997.

The results illustrate venture capital-financed entrepreneurship culture as a specific example of entrepreneurship culture beneath the national level that can vary across geographies like the findings concerning Finland demonstrate. The findings show that this specific culture matters through having an impact on the structural evolution and performance of EEs and on the ways how they deliver or fail to deliver benefits to entrepreneurs.

The results show that venture capital-financed entrepreneurship and the emergence of success stories as outcomes of start-up and venture capital co-evolution within an EE are connected to a specific type of entrepreneurship culture. This paper also contributes to the literature by connecting the fundamentals of organisational imprinting to EE research.

The purpose of this paper is to examine three different responses to the Finnish 2005 tax reform that, among other things, reduced the corporate tax rate and hiked dividend taxation. Focus lies on the factors influencing the decision to change the fiscal year-end and whether earnings management is more prevalent when the decision is not taken.

This study uses the financial statement data of Finnish private firms and studies 350 fiscal year-end changing firms and 700 non-changing firms with logistic and linear regression analysis. Discretionary accruals are the proxy for earnings management.

The results suggest that firms seize the window of opportunity and extend fiscal years depending on the magnitude of the expected tax savings. Firms that do not change their fiscal year-end engage in more tax-induced earnings management. In terms of economic consequences, the earnings management approach is less economically significant.

This study only examines a limited number of firms that change their fiscal year-end, hence, care has been exercised in generalising the findings.

The findings may be considered when structuring future tax reforms, particularly when considering transition rules relating to changes in fiscal year-ends. The study may also have implications beyond tax reforms since the evidence of opportunistic changes in the fiscal year-end can be informative for tax authorities, independent auditors and creditors.

This study contributes to the relatively scarce literature on private firm responses to tax policy changes by analysing both upward and downward earnings management, as well as changes in the fiscal year-end. This is in contrast to previous research that mainly focusses on listed firms and absolute earnings management or earnings management in one direction.

In many countries, small and medium-sizes enterprises (SMEs) are primarily responsible for wealth, economic growth, innovation and research and development. In this paper, the authors examine the impact of family ownership and owner involvement on the financial performance of unlisted Finnish SMEs.

This is an empirical paper using a random sample of 1,137 non-listed Finnish SMEs. Through regression analyses and robustness tests, the authors examine the effects of family management, family and employee ownership and involvement.

Using profitability measures, the authors find family-owned and controlled SMEs perform significantly better than non-family firms. The number of family members actively involved in daily business operations bears a significant negative relation to firm performance. In contrast, non-family firms in which owners are actively involved, provide comparable returns to family firms, suggesting that in non-family firms active involvement contributes to performance. The authors find that employee ownership in SMEs does not provide an efficient way to compensate employees since more dispersed ownership does not lead to higher performance.

SME employee ownership does not provide an efficient way to compensate employees since more dispersed ownership does not lead to higher performance.

In the case of Finland, family ownership is an effective organisational structure. As the depth of the COVID pandemic remains uncertain, firms with committed ownership are key to the economic recovery.

The authors approach the family ownership and involvement issue from a different angle. Unlike earlier studies, the authors examine the impact of both family ownership and involvement on the financial performance of privately owned SMEs. This paper helps shed light on the role of family ownership and involvement as a possible explanatory factor of overall economic performance.

The purpose of this paper is to enrich extant understanding of the role of both agency and context in the uptake of sustainability assurance. To this end, the authors examine auditors' attempts to promote sustainability assurance and establish it as a practice requiring the professional involvement of auditors.

Applying institutional work (Lawrence and Suddaby, 2006) and institutional logics (Thornton, 2002; Thornton et al., 2012) as the method theories, the authors examine interview data and a variety of documentary evidence collected in Finland, a small society characterized by social and environmental values, beliefs in functioning institutions and public trust in companies behaving responsibly.

With this study, the authors make two main contributions to extant literature. First, the authors illustrate the limits that society-level logics related to corporate social responsibility, together with the undermining or rejected institutional work of other agents, place especially on the political and cultural work undertaken by auditors. Second, the study responds to Power's (2003) call for country-specific studies by exploring a rather unique context, Finland, where societal trust in companies is arguably stronger than in many other countries and this trust appears to affect how actors perceive the need for sustainability assurance.

This is one of the few accounting studies that combines institutional logics and institutional work to study the uptake of a management fashion, in this case sustainability assurance.

Purpose – This chapter investigates the role of the multinational enterprise (MNE) in Finland, a small but advanced economy known for its innovative industry clusters. Specifically, the research explores how resource sharing differs between national MNEs, foreign MNE subsidiaries and solely domestic enterprises by type of resources transferred, industry cluster, international orientation, ownership and linkage type.

Design/methodology/approach – The responses are drawn from 85 of Finland's 500 largest firms using a survey instrument for data collection. Results are analysed using SPSS/PASW.

Findings – The chapter provides evidence that MNEs share innovation-related resources via collaborative and supply chain linkages. More importantly, it confirms the important role of national flagship firms – those firms that are Finnish by origin but international in scope. The findings suggest that local cluster development may be attractive to foreign MNEs, but is more likely shaped by the significant contributions to resource sharing made by national MNEs. The research also finds that linkages with customers rather than suppliers are more likely to involve resource sharing, highlighting the importance of forward linkages in the small, advanced economy context.

Originality/value – The results suggest that future research should take a finely grained approach to examining the role of MNEs in resource sharing. Determinants such as types of resources, MNE characteristics and types of linkages are important inclusions in future work.

The purpose of this paper is to examine novel corporate governance-based determinants of risk disclosures among index-listed Finnish companies. Therefore the focus of the study is on explaining the board’s monitoring role in relation to corporate managers.

Firms’ risk disclosures are analysed in terms of their Quantity and Coverage. The authors focus on two board characteristics not examined in prior related literature: first, non-executive board members’ self-interested financial incentives, measured by their share or option ownership, and annual compensation and second, non-executive board members’ competence, measured by their experience in the company and managerial capability proxied by prior education. The sample is composed of the OMXH-25-listed firms, representing the most traded and followed firms among Finnish publicly listed companies.

The authors find that the risk disclosures of these firms can be explained by financial incentives (wealth and compensation) and competence-related factors (attrition rate and education). The results indicate that among the “best disclosers”, the narrative risk disclosures are, on average, on a high level, and variation in risk reporting is largely associated with board characteristics.

The relatively small sample size makes the results vulnerable to type two error. Further research could continue by examining the impact of board work on corporate disclosures across countries and disclosure items.

Board members’ financial incentives and competence impact the dynamism of board work. In this way, they are also associated with board members’ disclosure decisions.

This paper contributes to the extant literature by demonstrating the impact of previously unexamined board characteristics on the quality of the narrative risk disclosures of highly followed firms.