This study investigates the impact macroeconomic factors have on corporate capital structure in Sweden. We use a panel data analysis of unbalanced data for the sample period, 2005-2014. While previous research has shown that key factors internal to the firm are highly correlated with leverage, such as profitability, asset tangibility and firm size, we add external factors and test for economic growth, inflation, interest rates, corporate tax rates, and exchange rates. Our models do not present any substantial explanatory power for the relationship between the macroeconomic environment and different leverage ratios. This study finds some support for certain indicators, although not consistent across ratios.

Whether we would like to model imports and exports, or forecast inflation, structural variation in an economy frequently causes problems. This thesis examines such variation in two dimensions: first, in a cross-section of individuals, and secondly, over time. A panel of manufacturing industries in several developed countries reveals that there is substantial variation across sectors, in the response of trade to changes in prices and incomes. Ignoring this heterogeneity can render conventional results biased and inconsistent, so a number of robust methods are used to obtain reliable estimates of long-run and short-run trade relationships. The findings point to common behaviour across sectors, which could be due to similarities in technology. The impact of structural breaks over time is examined in the second part of the thesis. Unpredictable shifts in deterministic terms such as the mean of a process are shown to generate significant forecast failure, and even the methods used to evaluated forecast accuracy are affected. Using the Kullback-Leibler discrepancy to measure the size of forecast errors, various robust mechanisms are discussed, that do not fail systematically after a break. Although they can provide a degree of insurance if a shift does occur, this comes at a cost if there is no change, and in the presence of measurement error they can exacerbate the uncertainty surrounding a forecast. An empirical illustration with a model of UK money demand provides some support for the automatic correction mechanisms, although there does seem to be a role for direct modeling of a break process.

Performance of stock markets is determined by three classes of variables: macroeconomic indicators, industry & firm heterogeneity and third country effects. When assessing performance of a stock market index, impact of industry & firm heterogeneity is marginal as it is already embedded in the index through its constituent companies. This paper will therefore focus on the other two. Chinese stock market was selected as an application as their performance compared to other domestic indicators (mainly GDP growth) is considered inferior by many researchers. Using econometric framework for panel data and a Bayesian extension, the paper estimates multiple models of Chinese stock market performance examining individual determinants of it. Subsequently, it predicts development of theoretical prices of two main Chinese stock indices on two time samples until 2013. The paper then demonstrates underperformance of Chinese stock market by comparing the modeled prices to actual prices realized on the market. JEL Classification C23, C51, C53, G15, G17 Keywords underperformance, panel data, fixed effects model, Bayesian Model Averaging Author's e-mail roman_kovac@ymail.com Supervisor's e-mail karel.bata@seznam.cz

Well-managed working capital plays an important role in running a sound and successful business as it has a direct influence on liquidity and profitability. Working capital management (WCM) has recently received an increased focus from businesses and been regarded as a key managerial intervention to maintain solvency, especially during the global financial crisis when external financing was less available (PwC, 2012). This thesis contains a comprehensive analysis of the determinants and consequences of WCM. For the determinants of WCM, the results suggest that the nature of a firm’s WCM is determined by a combination of firm characteristics, economic condition, and country-level variables. Sources of financing, firm size, and levels of profitability and investment in long-term assets play a vital role in the management of working capital. The financial downturn has also put increased pressure on firms to operate with a lower level of working capital. In addition, country-level variables (i.e., legal environment and culture) have a significant influence on determining a firm’s WCM as well as its determinants. For the consequences of WCM, the findings highlight the importance of higher efficiency in WCM in terms of its potential contribution in enhancing profitability. In particular, firms operating with lower accounts receivable, inventory, and accounts payable periods are associated with higher profitability. Firms can also enhance their profitability further by ensuring a proper “fit” among these components of working capital. Finally, achieving higher efficiency in inventory management can be a source of profitability improvements during the financial crisis. Overall, the thesis contributes to the accounting and finance literature in two distinct ways: research design and new findings. A more extensive data set (in terms of countries coverage and time frame), new estimation technique (i.e., dynamic panel generalised method of moments (GMM) estimation to produce more consistent and reliable results), and substantive robustness tests (conspicuous by their absence in prior studies) were applied and result in several new empirical findings. First, a firm’s WCM is influenced not only by internal factors but also external factors such as country setting, legal environment and culture. Second, a comprehensive measure of WCM (i.e., cash conversion cycle (CCC)) does not represent a useful surrogate for the effects of WCM on corporate profitability. Instead, an examination of the individual components of CCC gives more pronounced and valid results. Third, by managing working capital correctly, firms can enhance their profitability even further, at different levels, and through different components of profitability (including profit margin and asset productivity).

<p>This paper investigates the effects of intergovernmental grants on municipal labour demand in Finland and Sweden during the period 1985-2002. Both these countries have large public sectors in which local authorities play a significant role. In addition, both countries went through major grant reforms in 1993, reforms that meant that most targeted grants were replaced by general, non-earmarked grants. This allows for studying the effects of the different types of grants separately. The results suggest that targeted grants affect Finnish municipal employment more than general ones do, at least when looking at levels. When looking at elasticities, however, the opposite is indicated. In Sweden intergovernmental grants appear to have no effect at all on municipal employment before the reform, but after the estimated elasticity is 0.10. This is somewhat lower than in Finland, where the estimated elasticities are 0.13 and 0.14 before and after the reform, respectively. The results also lend additional support to the so called “flypaper effect”, an empirical phenomenon that has been observed in numerous previous studies.</p>

This paper investigates the effects of intergovernmental grants on municipal labour demand in Finland and Sweden during the period 1985-2002. Both these countries have large public sectors in which local authorities play a significant role. In addition, both countries went through major grant reforms in 1993, reforms that meant that most targeted grants were replaced by general, non-earmarked grants. This allows for studying the effects of the different types of grants separately. The results suggest that targeted grants affect Finnish municipal employment more than general ones do, at least when looking at levels. When looking at elasticities, however, the opposite is indicated. In Sweden intergovernmental grants appear to have no effect at all on municipal employment before the reform, but after the estimated elasticity is 0.10. This is somewhat lower than in Finland, where the estimated elasticities are 0.13 and 0.14 before and after the reform, respectively. The results also lend additional support to the so called “flypaper effect”, an empirical phenomenon that has been observed in numerous previous studies.

This dissertation seeks to analyze, both theoretically and empirically, the impact of quality of governance on growth by looking at various dimensions of the concept of governance. We use a dynamic panel estimator and various indicators of governance to estimate the impact of governance on growth. Our empirical results suggest a positive and statistically significant impact of governance on growth. The second part of the analysis looks at a possible transmission mechanism of the effect of governance on growth through the composition of expenditures. As such, we estimate a seemingly unrelated regressions (SUR) model with shares of three functional categories of public expenditures – education, health, and defense – in total spending as the dependent variables. We find that high quality governance leads to a higher share of education and health expenditures and a lower share of defense expenditures in total expenditures. Further, we examine the impact of governance of public capital spending. Our empirical results from this analysis suggest that high quality governance is associated with a smaller share of capital expenditures in total expenditures

The purpose of this research was to empirically examine the impacts that the presence of a state trading enterprise (STE) has in the international wheat market. There are numerous types of STEs that function in different ways to achieve many different types of policy objectives which are often unique to a particular STE. Although the existence of a STE is justified by the countries involved using numerous policy rationales, the fear that they are used as a front for trade protectionism is a prevalent concern. One specific aspect of a STE that often brings this concern to the forefront is whether or not the STE has the exclusive privilege of monopoly status.<p>The empirical objective of this thesis was to determine specifically if the use of a STE exporter has had a positive impact on world wheat trade over the 1970 2005 period and if the use of a STE importer has had a negative impact. In addition, the marginal impact of the STE having monopoly status was tested. In all cases, the designation of STEs and their monopoly status is based on WTO notification documentations. To secure econometrically robust results, a modified conventional gravity model was chosen. This model was estimated using pooled OLS and fixed effects, the latter consisting of both time and country pair fixed effects. The data that was constructed was a large panel data set of bilateral wheat trade spanning from 1970 to 2005. The model was also tested on a number of subsamples representing countries at different stages of development and in different income categories to isolate potential differences in STEs objectives and impacts.<p>In virtually all models, the presence of a STE exporter had a strongly significant and positive effect on the value and volume of wheat exports from the country with the STE exporter. The fact that a STE had monopoly status did not have any additional impact on wheat trade. The impact of STE importers was insignificant.

This thesis uses a panel of Swedish counties over the years 1976-2007 to investigate the relationship between suicide and a range of socio-economic determinants. Moreover, the thesis is combining sociology and economics in order to understand the part of suicide that can be considered as rational. In addition, suicide is studied separately for total, male and female suicide rates. Contrary to prior research in the field of suicide, this study formally tests for gender differences. Applying a fixed effect model, we managed to uncover a statistically significant gender difference for female labor force participation relation to suicide. When applying fixed effect models most of our results were in accordance with the socio-economic theory of suicide. We found a significant u-shaped relationship between suicide and the level of alcohol sales (consumption). We also found a statistically significant positive relationship between the total suicide rate and female labor force participation. Moreover, we found that higher population density significantly leads to fewer suicides in the total and male model. Furthermore, we found that unemployment increases the male suicide rate. In some cases, however our results contradicted the theory. Our results give evidence that divorce has a negative and significant effect on total and male suicide rate. These findings are not only violating the theoretical framework but previous research as well. We can thus conclude that the socio-economic theory of suicide, in most cases, assistances us to understand suicide.

The purpose of this research was to empirically examine the impacts that the presence of a state trading enterprise (STE) has in the international wheat market. There are numerous types of STEs that function in different ways to achieve many different types of policy objectives which are often unique to a particular STE. Although the existence of a STE is justified by the countries involved using numerous policy rationales, the fear that they are used as a front for trade protectionism is a prevalent concern. One specific aspect of a STE that often brings this concern to the forefront is whether or not the STE has the exclusive privilege of monopoly status.<p>The empirical objective of this thesis was to determine specifically if the use of a STE exporter has had a positive impact on world wheat trade over the 1970 2005 period and if the use of a STE importer has had a negative impact. In addition, the marginal impact of the STE having monopoly status was tested. In all cases, the designation of STEs and their monopoly status is based on WTO notification documentations. To secure econometrically robust results, a modified conventional gravity model was chosen. This model was estimated using pooled OLS and fixed effects, the latter consisting of both time and country pair fixed effects. The data that was constructed was a large panel data set of bilateral wheat trade spanning from 1970 to 2005. The model was also tested on a number of subsamples representing countries at different stages of development and in different income categories to isolate potential differences in STEs objectives and impacts.<p>In virtually all models, the presence of a STE exporter had a strongly significant and positive effect on the value and volume of wheat exports from the country with the STE exporter. The fact that a STE had monopoly status did not have any additional impact on wheat trade. The impact of STE importers was insignificant.