Markku J. Vieru

Personal Guarantees, Loan Pricing and Lending Structure in Finnish Small Business Loans

This study analyzes the role of personal guarantees and collateral in the context of two different lending structures: one transaction and the other relationship based. The innish bank data, which were uniquely accessible for the study, enabled an exploration of credit files with specific details of the characteristics of the lending relationship during the period 1995–2001. According to the empirical results, the use of personal guarantees is an indication of transaction‐based lending. Personal guarantees seem to increase the loan premium in transaction‐based loans more than in relationship‐based loans. Close ties between a bank and a firm seem to be a desirable basis for small and medium‐sized enterprise bank lending.

Demand for downhill skiing in subarctic climates

ABSTRACT This paper investigates the determinants of ski lift revenues between 1998/1999 and 2014/2015 in 20 ski areas in Finland by differentiating among winter climate conditions. Results based on dynamic panel data estimations reveal that revenues depend positively on real GDP, snow depth, and an early Easter, and negatively on relative ski lift ticket prices. The magnitude of the link between ski lift revenues and snow depth is large, but ski areas in northern Finland are less sensitive to variations in natural snow depth than those in southern or central Finland. Winter seasons with low snowfall (i.e. between 30% and 75% below average) lead to a reduction of 23% in ski lift revenues in southern Finland, of 8% in central Finland, and of 5% in northern Finland. A high amount of natural snowfall early in the winter also has a positive impact on revenues for the overall season. Despite strong investments in snowmaking facilities, even ski areas at the highest northern latitudes are not insensitive to variations in natural snowfall.

Impact of rouble’s depreciation on Russian overnight stays in Finnish regions and cities

This article investigates how the depreciation of the Russian rouble against the euro has affected Russian tourism demand in Finnish regions and cities. Using dynamic panel data models, the authors find that the elasticity of Russian tourists’ overnight hotel stays with respect to exchange rates is significantly larger than 1 (approximately 1.6) in absolute terms, indicating that Russian tourists are highly sensitive to changes in exchange rates. There is some evidence that the sensitivity of Russian tourism demand increased following the introduction of economic sanctions in August 2014. The sensitivity of tourism demand to exchange rate changes differs highly across regions and cities, with higher elasticities in border regions and cities not too far from the Russian border. These regions and areas attract a significant number of short-stay Russian visitors who are often motivated by cross-border shopping and other activities.

Use of Interim Earnings Information on the Helsinki Stock Exchange

In this paper we study how the market uses the information on current and past interim earnings. Our hypothesis is that investors focus on a comparison of year-to-year changes in interim earnings. We provide further evidence on how the market acts in the face interim earnings announcements in an emerging market. The data is based on the Finnish market covering the years 1992-2002. We found, consistent with Ball and Bartov, evidence that investors underestimate the magnitude of the serial correlation in interim earnings. The results suggest that investors use, at least in part, a seasonal random walk model when forming earnings expectations.

International tourism demand to Finnish Lapland in the early winter season

This paper investigates the determinants of international overnight stays to Finnish Lapland in the early winter season. The data are based on major winter destinations for the period 1996–2014 and are distinguished by nine major visitor countries. During the sample period, international overnight stays in December increased rapidly with a growth rate of nine per cent per year on average. Dynamic panel data models show that the effect of natural snow conditions on overnight stays varies across countries of origin. The amount of snow in December has a significant impact on overnight stays of visitors coming from neighbouring countries (Russia and Sweden). In contrast, snow conditions do not play a role for visitors from distant countries (the United Kingdom, Germany, France, Italy, Japan, Spain and Switzerland). Economic factors (real income and real exchange rates) play a larger role for these countries.