Redefining the Rules of the Economic Game
New Horizons in Institutional and Evolutionary Economics series
Edited by Marie-Laure Djelic and Sigrid Quack
Chapter 2: Global Investors Meet Local Managers: Shareholder Value in the Finnish Context
Risto Tainio, Mika Huolman, Matti Pulkkinen, Jyrki Ali-Yrkkö and Pekka Ylä-Anttila INTRODUCTION Listing on the New York Stock Exchange in 1994 was a far more important step than we ever thought. But the access to capital was less important than the presence as such. (Jorma Ollila, President and CEO of Nokia, 28 March 2000) There is no doubt that listing on the world’s most demanding stock market is a significant step in the life of any company. But listing on less demanding local stock exchanges becomes an almost equally important step when stocks are traded there by foreign investors. In both cases, the company becomes part of global capital markets and is thus subjected to new rules of the game. These rules reflect the principle of shareholder value maximization (Williams 2000). The purpose of this chapter is to explore the ways in which these new rules of the game affect Finnish companies and the Finnish economy as a whole. Companies may have different reasons for listing on a foreign stock exchange or inviting foreign investors. Usually they need cash to expand their business. Sometimes they are in the process of building a brand name and therefore need the public and media exposure. In practice, a public stock offering with an international dimension brings access to new sources of capital and shareholders. As indicated above, listing on the NYSE in 1994 provided capital for Nokia, but it also started the process through which the company went from being predominantly Finnish...
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