Not unlike elsewhere, the government in Finland has been keen to provide funding to Finnish firms, especially to small and medium-sized enterprises (SMEs). In this paper we review, in the light of the economic rationales for public efforts to finance SMEs, all of the government institutions...

We study the capital market implications of mandatory auditor choice. This regulatory intervention provides us with an instrument that can be used to examine the role of asymmetric information in the market for small business finance. We propose, in particular, a new exogenous measure of...

Despite the voluminous and growing literature on financial constraints, the origins of the constraints are hardly ever empirically analyzed. This paper offers such an analysis. We study, in particular, the empirical prevalence of adverse selection and moral hazard in capital markets using a...

A key input to inventive activity is human capital. Hence it is important to understand the monetary incentives of inventors. We estimate the effect of patented inventions on individual earnings by linking data on U.S. patents and their inventors to Finnish employer-employee data. Returns are...

One commonly mentioned rationale for public funding is its positive signaling effect, often called the “halo-effect”, to the private sector financial institutions about the quality of the firm. This is based on the market failure argument based on the existence of asymmetric information...

The Finnish government, in addition to providing finance to SMEs, has established a number of support mechanisms that provide assistance to SMEs via free or subsidized business support services. In this paper, we review the public organisations providing business services, and the instruments...

This paper examines empirically how firm ownership structure affects its research- and development (R&D) intensity. To begin with, a principal-agent problem created by the separation of the management of a firm (the agent) and its ownership (the principal) is reviewed, and prior empirical...

The earnings-related pension system is partially pre-funded in Finland and has currently large reserves. This has roused debate whether the pension funds should take a more active role in promoting employment, growth and domestic ownership of the firms. We analyse the justifications presented...

This paper studies how firms contribute to the productivity growth of an industry over their lifecycle. We present a decomposition method that allows us to condition the components of productivity growth on the age of production units. We find evidence for a prolonged positive exit effect that...

Finpro is an expert service organization, partly financed from public funds, providing services for internationalization - market information, consulting and advice, business development, and other related services. It is one of the largest organizations in the Finnish innovation and business...