NHH Brage (Norges Handelshøyskole)
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The interaction between leverage and cash-balance dynamics : An empirical study of time-series variation in leverage and cash-balance ratios in publicly listed firms in the Nordics
Get PDFThis paper investigates whether time-series variation in leverage can be linked to
hypothetical cash-balance squeezes for Nordic firms. The methodology in this paper
is based on the article by DeAngelo, H., Concalves, A. S., & Stulz, A. S. (2022). We
uncover that high time-series variation in leverage and cash-balance ratios is the norm
for firms facing hypothetical cash squeezes in the period January 2000 to December 2021.
Capital expenditures are found to be the main users of funds and the primary driver of
time-series variation in leverage ratios.
Overall, we document an empirical link between leverage and cash-balance dynamics.
Over extended time periods, cash ratios display wide variations that closely resemble and
complement the dynamics of capital structure. The interactions between leverage and
cash dynamics align with the predictions of the internal-versus-external funding regime
outlined in Myers & Majluf (1984). When cash ratios remain stable, leverage tends to be
highly volatile, and vice versa. Net-debt ratios are almost always volatile. As internal
funds (cash balances) become scarce, most firms significantly increase their leverage. The
latter is especially true for firms delisted due to bankruptcy or liquidation.
In sum, we report that there exists an interaction between leverage and cash balances.
Consequently, researchers and companies should start to consider the two financial items
as co-dependent rather than univariate variables. The research in this paper is placed
in the intersection between the research fields of capital structures and cash balances,
providing valuable insights to the small research field of leverage and cash dynamics.nhhma
Breaking Waves : New Energy’s Open Innovation Strategy for Shaping the Maritime Industry : An Exploratory Case Study
Get PDFThis thesis explores how an established firm can leverage an organizational setup for open
innovation, in order to become more sustainable. The phenomenon is investigated through an
exploratory case study, examining New Energy, a company owned by the established
Wilhelmsen group. Through semi-structured interviews and observation, the findings are
related to the literature on open innovation, corporate venture capital, and innovation at the
edge.
The study’s findings are twofold. Firstly, the study identifies how New Energy’s setup and
dynamics align with the open innovation approach. New Energy was established as an open
innovation initiative, leveraging its network by opening its company borders and accessing
resources from internal and external actors. By effectively balancing an external and internal
focus, New Energy creates a unique opportunity to access diverse resources, fostering
industrial synergies and collaborations that contribute to Wilhelmsen’s sustainability agenda.
The study also suggests that New Energy’s dual focus reduces resistance within Wilhelmsen
and is beneficial when establishing relationships with external partners.
Secondly, the findings demonstrate how New Energy encompasses elements from literature on
both corporate venture capital and innovation at the edge, with a stronger alignment with the
edge approach. In line with the edge literature, New Energy has an external focus and pursues
innovative projects alongside Wilhelmsen’s traditional operations. In addition, New Energy
experiences capital restrictions, incentivizing the company to utilize its network. However, the
findings also reveal some unique features not extensively covered in existing literature. These
distinctive features are primarily linked to the New Energy team, as New Energy focuses on
having passionate people with a wide range of competencies. This has led to close team
dynamics and enables New Energy to access valuable resources in the network. Additionally,
the Executive Vice President’s characteristics and position in the group management team
contribute to a close relationship with Wilhelmsen. These features are important in New
Energy’s efforts to shape the maritime industry.
Overall, the findings provide valuable insights into the innovative characteristics of New
Energy, contributing to a more comprehensive understanding of how established firms can
respond to a changing business environment.nhhma
Collaborating as a growing hybrid team : An exploratory case study of an expanding R&D team navigating a hybrid work setting
Get PDFHybrid work settings and hybrid teams are increasingly common and already a reality in many
modern professional environments. The adoption of constant, professional hybrid teams has
outpaced the knowledge on such teams which are more complex than purely virtual teams, more
long-lived than project teams, and more professional than student groups. In addition, team
member growth in hybrid teams is understudied. Taking departure in a horizontal psychological
contract perspective, this project aimed to identify the challenges an expanding hybrid team
faces and to research how such a team can collaborate effectively. 12 core members of an
expanding R&D team operating in a hybrid setting were interviewed. Mapping the challenges
faced by the growing hybrid team in collaborating effectively, a broad range of crucial elements
are recognized and discussed. Essentially, team member growth and hybrid collaboration
complicate building a strong psychological team contract. The study finds a perceived difficulty
in building relations through virtual communication. It indicates the superiority of face-to-face
interactions prevails when aiming to develop the psychological contract. This is found to spill
over into making knowledge transfer and the integration of new members more challenging in
a hybrid team. To increase team size successfully the integration of new team members must
be a priority. Further, all team members should understand the bigger picture, it must be focused
on a productive meeting culture, and appropriate tools for internal communication and
knowledge sharing must be used. Additionally, an office environment made for hybrid
collaboration has to be created. The results are important findings constituting
recommendations for practitioners. The study adds to the literature on modern hybrid teams, to
research on team member growth, and to the body of research addressing the horizontal
psychological contract.nhhma
The Economics of the Global Minimum Tax
Get PDFThis paper shows that the OECD inclusive framework of Pillar Two fails to implement the claimed 15% minimum corporate tax for subsidiaries of multinational corporations. The reason is that the Substance-based Income Exclusion of Pillar Two allows to tax-deduct payroll costs and user costs of intangible assets twice from the tax base of the top-up tax. Employing a standard multinational firm model, we show that Pillar Two dampens tax motivated transfer pricing, but changes the employment, investment and import incentives. For a sufficiently large cost share of labor and/or capital, the Substance-based Income Exclusion is equivalent to a production subsidy
Governing Knowledge Sharing and Transfer in MNCs by Organizational Mechanisms Enabling Social Interaction
Get PDFThis dissertation aims to contribute to the understanding of how multinational companies
(MNCs) use organizational mechanisms enabling social interaction to govern knowledge
sharing and transfer within the company. The international management literature has, over
recent decades, shown an increased interest in the importance of social interaction in the
government of knowledge processes and integration of units by MNCs. Even though research
provides support for the association between social interaction and the sharing and transfer
of knowledge, researchers have neither fully explained how MNCs leverage this association
nor identified the underlying mechanisms whereby social interaction positively affects related
processes and under what conditions.
The dissertation consists of three papers: one literature review and two empirical studies. The
literature review investigates how organizational mechanisms enabling social interaction are
covered in the international management literature, with a specific focus on the role of
socialization and social capital. The review identifies seven main categories covering 35
different mechanisms, which are defined as formal or informal. Additionally, the review
proposes a model for how formal and informal mechanisms are connected to socialization and
the development of social capital. The empirical papers report two different studies. The first
investigates intra-organizational learning structures that enable social interaction among
managers across borders and examines the extent of their association with strategic and HRM
structures and the institutional context of the subsidiary’s operation. This paper investigates
both company-level factors and institutional context as a macro factor influencing the focal
subsidiary. The second empirical paper investigates the micro-foundations of knowledge
sharing and transfers within formal knowledge networks in an MNC. The focus is on the
interaction between knowledge-sharing behavior and knowledge application and how these
processes are influenced by network management, structural social capital, and different
types of autonomous motivation.
Together, these papers contribute to the understanding of how MNCs use organizational
mechanisms enabling social interaction to govern knowledge sharing and transfer within the
company
Winning by a Mile : A Mathematical Programming Approach to Reducing Distance and Ensuring Fairness in Travel in the FIFA World Cup
Get PDFThe FIFA World Cup presents a complex logistical challenge, featuring an intricate
tournament schedule that requires teams to frequently move between their base camps and
match venues. In this thesis, we explore the potential of mathematical programming as a tool
to devise an optimal tournament schedule that reduces extensive travel and ensures fair travel
distribution.
We create a FIFA World Cup scheduling framework consisting of mixed integer linear
programming models. The framework consists of a series of individual optimization models,
crafted from the guidelines of the World Cup of 2014 and 2018. All models yield significantly
improved objectives relative to the historical benchmarks of 2014 and 2018. For the models
minimizing total distance traveled throughout the group stage, the results range from a
decrease of 25% to 48% in distance covered compared to historical distances. For the models
minimizing the distance between the least and most traveling teams among all teams, the
results range from a decrease of 81% to 96% for this inner range compared to historical
differences. For the models minimizing the distance between the least and most traveling
teams within each group, the results range from a decrease of 83% to 98% for the sum of the
groupwise inner ranges compared to the sum of the historical groupwise inner ranges.
We further combine the individual objectives into a multi-objective model using the �-
constraint method, thereby showcasing a Pareto front of candidate solutions that all yield
results that surpass the historical benchmarks for both objectives simultaneously.
Our findings strongly indicate that utilizing mathematical programming for the World Cup
match scheduling process offers the potential to reduce the overall distances traveled while
concurrently ensuring a more balanced distribution of travel burdens among the participants.
We highlight the 2026 World Cup as an ideal prospect for implementing this approach.nhhma
Attestasjon av bærekraftsrapporter En studie av aktuell attestasjonspraksis hos de fem store revisjonsselskapene i Norge, med fokus på veien videre mot internasjonal regulering
Get PDFBærekraft har blitt et begrep som tar større og større plass i selskapsrapportering. Med
økende fokus fra interessenter tvinges selskaper til å redegjøre for deres miljømessige og
sosiale avtrykk. Foreløpig er rapportering på ikke-finansiell informasjon frivillig i Norge.
EU har også erkjent betydningen av bærekraftig utvikling, og er i ferd med å implementere
lovverk som gjør mange selskaper pålagt å rapportere ikke-finansiell informasjon.
Rapportering i seg selv er ikke tilstrekkelig, informasjonen må attesteres av en ekstern
tredjepart for å styrke pålitelighet og troverdighet. Norge står foran et vippepunkt i denne
sammenheng, hvor frivillig rapportering skal skiftes ut med lovpålagt rapportering.
Formålet med masterutredningen er å kartlegge dagens praksis på attestasjon av
bærekraftsrapporter og hvordan veien videre mot nye lovkrav blir for de fem store
revisjonsselskapene i Norge: Deloitte, KPMG, EY, PwC og BDO. Studien har også spesielt
fokus på vesentlighet, som er et sentralt begrep innen ikke-finansiell attestering. For å
besvare problemstillingen er det gjennomført åtte kvalitative, semistrukturerte intervjuer
(n=10), kombinert med en kvalitativ survey (n=13). Alle respondentene er ansatte fra "de
fem store”.
Studien har avdekket en stor grad av likhet i dagens etablerte praksis hos selskapene. De har
egne attestasjonsmetodikker utført av team med bred erfaring og kunnskap. Studien har også
kartlagt forventinger til at det nye regelverket vil fungere som en katalysator i omstillingen
til et bærekraftig næringsliv, gjennom økt gjennomsiktighet og sammenligningsgrunnlag hos
selskapene som rapporterer. Samtidig finner studien utfordringer knyttet til mangelfull
infrastruktur, korte tidsfrister og umodenhet hos kundene. Dobbel vesentlighet er et mye
omtalt tema som blir del av ny praksis, og endrer måten selskaper rapporterer på ikkefinansiell
informasjon.
Til sist presenteres en konseptuell modell som gir oversikt over dagens praksis og veien
videre i et tidsperspektiv. Modellen er basert på studiens funn, drøfting, analyse og
konklusjon.nhhma
Det teknologiske forventingssjokket i oppdrettsbransjen : et casestudie av hvordan landbasert lakseoppdrett kan endre den tradisjonelle oppdrettsbransjen
Get PDFI denne masterutredningen har formålet vært å analysere hvordan landbasert oppdrett har
påvirket forventinger og strategiske endringer blant etablerte oppdrettsbedrifter. Hensikten
har vært å identifisere variasjonene i forventingene der vi har fokusert på hvordan
landbasert oppdrett har skapt en disrupsjon i bransjen. Fra 2011 markerte landbasert
oppdrett, drevet av bærekraft, myndigheter, teknologisk fremskritt og kunnskap et mulig
skifte for industrien som potensielt kan indikere et forestående forventingssjokk.
VI har anvendt teori om prestasjonsforskjeller, eksterne sjokk med fokus på teknologiske
sjokk og strategiske beslutninger under slike sjokk for å forstå bransjens endringer og
bygging av absorberende kapasitet de siste årene. Fokuset har vært på hvordan bedrifter
responderer når forventinger endres og hvordan en endring i bransjedynamikken gjør at
etablerte bedrifter kan bli ufleksible og må endre sine strategier. Empirien er basert på en
kombinasjon av sekundærdata og primærdata fra semistrukturerte dybdeintervju med
nøkkelpersoner, hvor funnene er presentert i en todelt analyse som omfatter
oppdrettsbransjens historie og aktørenes varierende forventinger.
Våre funn indikerer at oppdrettsbransjen alltid har vært dynamisk, men at det har skjedd
tydelige forventingsbrudd siden 2011, spesielt i 2020 med børsnotering av landbaserte
oppdrettsbedrifter. Havbaserte oppdrettsbedrifter har reagert ved å investere i teknologi og
kunnskap for landbasert oppdrett. Selv om det er for tidlig å fastslå et fullstendig teknologisk
forventingssjokk, er forventingsbruddene tydelige og de etablerte bedriftene forbereder seg
ved å bygge absorberende kapasitet og øke organisatorisk fleksibilitet. Landbasert
oppdrettsevne til å produsere for lokale markeder er en viktig faktor som kan påvirke norsk
lakseeksport i fremtiden. Samlet sett tyder funnen på en bransje i endring, hvor et
forventingssjokk er mulig, og der bedrifter med sterkt absorberende kapasitet står best
rustet til å tilpasse seg hurtig og effektivt.nhhma
Sustainability in Procurement and the Link to Profitability : An Exploratory Study
Get PDFThis thesis explores how sustainability focus in the procurement function affects a firm's profitability. Sustainability has become increasingly relevant for firms to address, as the adverse impacts of a business on society and the environment has become increasingly clear
in later years. We argue that the procurement function is exceptionally well situated to address sustainability within a firm and in conjunction with its greater supply chain. At the same time,
we recognize that profitability concerns are pivotal for the ability to implement sustainability
initiatives, as firms depend on profitability over time. Thus, we explore the link between
sustainability in procurement and profitability by deriving generalizable characteristics of the relationship between these topics. The relationship can be bi-directional; however, in this thesis, we focus on how sustainability in procurement affects profitability.
The research was conducted using an exploratory case design, where qualitative data was collected through six semi-structured interviews. Then, thematic analysis was used to analyze the data. From 85 unique codes, we identified nine themes regarding the relationship. Finally,
we structured the findings by identifying three dimensions of themes, or characteristics,
affecting profitability when implementing sustainability initiatives in the procurement function. Firstly, we find that the procurement function's possibility to implement initiatives through trade-offs and limitations may influence the revenue and cost effects. Secondly, the procurement function's basis, that is the employees' perceived need to address sustainability,
affects profitability through maturity and perceived relevance. Lastly, the dimension means,
the degree to which a firm will succeed in implementing sustainability initiatives, is identified
to affect profitability through a firm's prerequisites and supplier relationships. The findings
are formalized in a framework that a firm can utilize to optimize the implementation of
sustainability initiatives in their procurement function, enabling the firm to positively affect the profitability outcome of a given sustainability initiative.nhhma
Empirical Analysis of AIS Data‘s Ability to Detect Suspected Dark Oil Tankers in Russian Ports and Waters : An analysis in light of the Russian and Ukrainian conflict
Get PDFThis master´s thesis investigates the ability of AIS data to detect suspected dark tankers in
Russian ports and waters in light of the ongoing Russian and Ukranian conflict. The thesis
aims to serve as a stepping stone between AIS data and satellite data in detecting dark
tankers and show the possibilities and limitations of AIS data. By employing a geospatial
analysis approach, which includes polygon and hexagonal tiling, the study narrows the
focus to specific geographic regions that exhibit potential signs of suspicious activities.
The methodology involves an extensive filtering process to scrutinize tanker behavior,
effectively reducing the scope of the investigation to 14,3 percent of the tanker fleet. While
the model demonstrates success in flagging potential dark tankers, the intrinsic constraints
of AIS data mean that conclusive evidence of illicit activities, cannot be ascertained
without the corroborative power of satellite data. Additionally, the thesis undertakes
a secondary empirical analysis to investigate the impact of the $60 price cap, set on
December 5, 2022, on Russian port activities. The findings indicate a notable uptick in
operations and a strategic pivot towards eastern Russia. This study also explores the
intricate ownership structures of the vessels in question, shedding light on the complexities
of maritime operations within a sanctioned environment.nhhma