3-minute Lecture on Globalisation by Professor Michael Funke
At the beginning of February 2022, Dr. Michael Funke, Professor at the Department of Economics, Hamburg University, and Adjunct Professor at the TalTech Department of Economics and Finance visited Tallinn.
Investor of the Year and Lecturer of Finance Recommends Investing in Knowledge
Kristjan Liivamägi, economist, investor and lecturer of finance at the TalTech Department of Economics and Finance was recently chosen as the "Investor of the Year" by the Äripäev newspaper. The "Investor of the Year" award is given to the investor who has contributed the most to the promotion of Estonian investing culture and the sharing of financial wisdom. Below you will find the interview with him.
On 22 January you were awarded the „Investor of the Year 2022“ title by the Äripäev newspaper. Please tell us, what brought you to finance and investing?
I started investing when I was a 19-year-old boy because I was looking for solutions to preserve the purchasing power of my savings. It was the spring of 2006, and there was a very high inflation in Estonia. I understood that if I just kept money in my bank account, it would lose its purchasing power. After considering various options, I ended up at the Tallinn Stock Exchange, where I bought my first shares – Saku Brewery and Rakvere Meat Processing Plant. This decision was motivated by the wish to protect my savings from the inflation, but it turned out to be the beginning of an exciting and interesting journey in the world of finance, which has culminated with a PhD degree in Financial Economics and an investment portfolio worth over one million euros.
It seems that the investor of the year could just enjoy the life of a rentier. Why bother with science?
The honest answer is that my passive interest, dividend and rent incomes are several times larger than my family’s expenses and I indeed do not need to work. Yet, I give lectures at Tallinn University of Technology and do research because if I have the freedom to do whatever I wish, then what could be better than pursuing my passion, hobby and love which is studying investing and financial markets. My research examines the behavior of investors at the financial markets to find out why some are successful but some are not.
In addtion to doing research, you also teach university students – you give lectures in the Personal Finance, Basics of Finance, Investment Analysis and Financial Management courses. You have been a lecturer for almost 10 years now, have there been any noteworthy trends or developments, and how have your students changed during that time?
For me, sharing knowledge is one part of the mission to increase the financial wisdom of the Estonian people. During the last ten years, students have become more knowledgeable and interested in investing and finance. I see every week how they come to lectures with a spark in their eyes and a true desire to acquire new knowledge and practical skills. It is really wonderful and gives me motivation to continue teaching financial wisdom.
How have you yourself developed and changed as a lecturer? What advice would you give to yourself 10 years ago?
Leaving aside professional development, the greatest change has been in the public speaking skills. My advice to me 10 years ago would be to remember that how you say something it is very important - 80% of your success as a speaker comes from your body language and only a little over 10% comes from what you say.
You are a valued teacher: most recently students awarded you with the „Lecture Guru of the year 2020“ and the „Lecturer of the Year 2021“ titles - not to mention all the earlier titles. What are the most important aspects of being a good lecturer?
In my opinion, inner passion and motivation are very important – without them it is really hard to engage students. In addition to that, especially in the field of investments, it is very important to have practical experience. It would be very difficult to keep up with the changing times as a pure theoretician.
What do you like to do in your spare time? How do you rest and recharge?
Sports is very important for me. I started playing sports when I was two years old. Earlier I played handball on the professional level, now I exercise four times a week on average: I swim, run and go to the gym. Healthy eating and sleep are also essential – I need at least 8 hours of sleep to function effectively, so I really like to sleep.
An additional hobby of mine is numismatics. I also enjoy playing chess and Monopoly with my kids.
To conclude – how to preserve and grow your wealth at this current time of uncertainty? What would be your recommendation?
The investment with the highest long-term returns is investing in your own knowledge – no other person or an economic downturn can ever take it away. Knowledge and experience can be converted into money or other assets throughout the entire life.
Tõnn Talpsepp elected to the Estonian Young Academy of Sciences
On 3 December 2021, the general assembly of Estonian Young Academy of Sciences (EYAS) was held and 13 new members were elected. Among them was Tõnn Talpsepp, senior researcher at the Department of Economics and Finance, whose primary field of research is behavioural finance, market efficiency, and volatility. He is also an esteemed investing expert in Estonia. He defended his doctoral thesis entitled “Investor behaviour and volatility asymmetry” at the Tallinn University of Technology in 2010. He is currently completing a postdoctoral fellowship at Aalto University.
Triinu Tapver won the Vello Vensel Research Prize
From 28 to 30 June 2021, the Summer School of the Doctoral School in Economics and Innovation was held in Narva-Jõesuu.
Among the presenters were three PhD students of the TalTech Department of Economics and Finance: Heili Hein, Orsolya Soosaar and Triinu Tapver. We are glad to announce that the 2021 Vello Vensel Doctoral Research Prize given by the Estonian Economic Association for outstanding research work was awarded to Triinu Tapver.
"FinTech Report Estonia 2021" has been prepared
TalTech School of Business and Governance in cooperation with FinanceEstonia prepared a report on the Estonian FinTech sector. It provides a thorough overview of the current status of the Estonian FinTech ecosystem, characteristics of business models of companies, factors affecting companies’ location choices as well as regulative developments and changes in the outlook of the sector during the last two years.
The analysis shows that:
- At the end of 2020, there were at least 215 companies registered in Estonia that could be considered FinTechs.
- The market is continuously being dominated by companies involved in digital asset exchange or digital lending. At the same time, all important sub-fields of FinTech are covered in Estonia and the business models of companies remain diverse.
- Although the business volumes of Estonian FinTechs are still rather modest in comparison to the financial sector as a whole (in 2019 the total assets of FinTechs amounted to 1.03 billion euros), the revenues of FinTech companies reached 235 million euros in 2019.
- Estonian FinTech ecosystem is built on FinTech companies and its development is supported by the strong local entrepreneurship culture and availability of digital infrastructure. Still, obstacles are seen in weak co-operation with the financial sector and amongst FinTechs.
- Location choices of companies are strongly affected by the connection of their founders with Estonia. Although companies value the strengths of the Estonian business environment, location decisions may be changed if enough customers or capital is not available or the company is not able to adjust to the regulative environment.
- The impact of the pandemic on the sector has been modest. The greatest challenges emerge from the regulative environment. Entrepreneurs look forward to a clearer roadmap in the creation of the regulative environment as well as more explanations to regulations and more support (incl. monetary support) for the field.
TalTech School of Business and Governance will continue to monitor the development of the Estonian FinTech sector in the coming years. The research team is grateful to all the parties who contributed to the completion of this report.
The full version of the report is accessible here.
Nominated academics at the Spring Banquet 2021
This year the traditional Spring Banquet organized by the Student Council of the School of Business and Governance took place electronically on Youtube (video in Estonian). Spring Banquet is a festive event to recognize and reward academic staff who are nominated and voted best by students in various categories.
The academics of the Department of Economics and Finance won six awards out of a total of twelve categories:
Kristjan Liivamägi – Fuse of Inspiration
Kirsti Rumma – Sunshine of the School of Business and Governance
Avo Org – Lecture Guru
Avo Org – The Living Legend
Raili Lahi – The Largest Helping Hand
Kirsti Rumma – The First Favourite
The academics are very grateful for the recognition. Congratulations and have a successful end of the school year!
Six courses of the Department of Economics and Finance were awarded the 2021 EKKA e-course quality label
Since 2008, HITSA (now EKKA) has been recognizing the work of outstanding e-course authors by awarding the e-course quality label. In the 2021 round, six e-courses of the Department of Economics and Finance were among the 34 award winners:
- Empirical Research Methodology Aaro Hazak, Signe Rosenberg
- Financial Management Laivi Laidroo
- Economic Development and Institutions Aaro Hazak
- Applied Economic Analysis Aaro Hazak, Heili Hein, Tarmo Tuul
- Refresher Course in Mathematics for Business Students Jelena Matina, Kirsti Rumma, Hakan Berber, Raili Lahi
- Statistics Kirsti Rumma, Raili Lahi
Kersti Harkmann defended her PhD thesis
On 19 March 2021, Kersti Harkmann, PhD student at the TalTech Department of Economics and Finance, defended her PhD thesis “Essays on Volatility and Contagion in Financial Markets”. The thesis consists of three publications investigating volatility and comovements in financial markets:
Stock Market Contagion from Western Europe to Central and Eastern Europe during the Crisis Years 2008-2012 focuses on the short-term comovements in financial markets shown in stock market returns. The dynamic conditional correlation coefficients (DCCs) increase gradually between 2002 and 2012. The analyses also demonstrate that the DCCs increase extensively when there is high stress in the financial markets. The dynamic correlations between the indices increased noticeably during the Global Financial Crisis,
and the peaks in the DCCs coincide with the major shock events of the sovereign debt crisis.
Integration of the Baltic stock markets with developed European markets examines long-term comovements using the cointegration methodology of Johansen (1988, 1991). The study assesses the extent of long-term integration of the Baltic stock markets of Estonia, Latvia and Lithuania with financial markets in Western Europe and the USA. The empirical analysis over the period 2005-2015 reveals that the Baltic stock markets are integrated with the Swedish stock market, and that the transmission of shocks goes from Sweden to the Baltic States. There is no evidence of any long-term relationships between the Baltic markets and the euro area or the USA, which suggests the Baltic markets offer diversification benefits for some stock markets.
Optimal currency hedge and the carry trade investigates how the side effects of comovements and volatility in financial markets can be mitigated in portfolio management. The publication studies how a risk-minimising investor holding a portfolio of foreign currency bonds could respond to covariations of the underlying assets to preserve the value of the portfolio by hedging some of the currency exposure. The performance of different hedging strategies is compared and the results show that for a risk-minimising investor, the hedging is always more beneficial than leaving the currency exposure open. The optimal hedging is superior to full hedging of the currency exposure. Moreover, it can be observed that portfolios with optimal hedges imply carry trades.
Supervisor of the thesis: Professor Karsten Staehr (TalTech)
Opponents: Assistant Professor Anita Suurlaht (University College Dublin) and Professor Christopher Hartwell (Zürich University of Applied Sciences)
This work was supported by Estonian Target Financing Grant no. SF0140059s12 and Base Financing Grant no. B45/2015.
Full text of the thesis is available at the TalTech library: [link]
Svetlana Ridala defended her PhD thesis
On 4 March 2021, Svetlana Ridala defended her PhD thesis „Essays on Language Skills and Labour Market Outcomes“ at the TalTech Department of Economics and Finance.
The findings of the doctoral thesis indicate that the positive effects of language skills on employment propensity and on wages are different for native-Estonian and Russian-speaking working-age individuals in Estonia, and that language effects also differ across gender lines. For Russian-speaking women who participate in the Estonian labour market, the knowledge of the Estonian language plays a more important role in determining the wages than for Russian-speaking men. For Estonians, the probability of finding employment depends significantly on the knowledge of the English language but not on the knowledge of the Russian language, for the Russian-speaking people to the contrary, the probability of finding employment depends mainly on the knowledge of the Estonian language and not so much on the knowledge of the English language. This finding is linked to the occupational segregation between Estonian and Russian-speaking working age population and suggests that significant challenges persist that need to be addressed with the integration policy in Estonia.
A novel contribution of Svetlana Ridala’s PhD thesis is the meta-study research based on international research literature. It investigates which factors associated with linguistic environment, local socio-economic development, global trends and research methods influence the findings about the effect of language skills on labour market outcomes. According to the meta-regression results, the effect is positive if the language is globally influential, also if local economy and labour market are well-advanced. In multilingual societies, local languages are also more valued alongside English which is the lingua mundi. Another finding is that accurate measurement of the language effect depends significantly on the data structures and econometric methods used.
Svetlana Ridala’s research is relevant both for the scientific community and policymakers as it helps to better understand labour market frictions caused by ethno-linguistic disparities, and to develop new evidence-based policies to make the labour-markets more cohesive.
The opponents at the defence were Professor David Bivin (IUPUI, USA) and Professor Michiru Nagatsu (Helsinki University, Finland).
Supervisors of the thesis: Professor Kadri Männasoo (TalTech), Dr Ott-Siim Toomet (Washington University, USA) and Associate Professor Ants Aasma (TalTech).
The full text of the thesis is available at the TalTech Library [link]
This project has received funding from the Erasmus Programme of the European Union [Project No 611059-EPP-1-2019-1-EE- EPPJMO-MODULE] and from the Horizon 2020 Research and Innovation programme [under Grant Agreement No 952574] "Individual Behaviour and Economic Performance: Methodological Challenges and Institutional Context (IBEP)
Triinu Tapver participates in the "Science in 3 minutes" contest
Popular science article by Triinu Tapver, early stage researcher at TalTech Department of Economics and Finance, was published in ERR Novaator as a part of the competition „Science in 3 minutes“. The article is based on her research which studies skill and luck in the performance of actively managed funds in Central and Eastern Europe.
The research indicates that although actively managed mutual funds may offer above-average returns in the short term, in most cases it is due to luck rather than fund manager skills.
Leaving aside the impact of the 2008 financial crisis, only 2 per cent of the funds in the study offered consistently higher returns than the market. However, nearly 40 per cent of fund managers make such bad decisions that lead to lower returns than could be achieved completely randomly without applying skills.
See the full article (in Estonian) here. The final results of the "Science in 3 minutes" contest will be announced on 5 February 2021.
Natalia Levenko defended her PhD thesis
On 17 December 2020, Natalia Levenko, PhD student at the TalTech Department of Economics and Finance, defended her PhD thesis "Uncertainty and Measurement in Macroeconomics".
The thesis consists of three publications covering selected macroeconomic topics with a special focus on economic uncertainty and measurement. The analysis is restricted to European economies as these countries play an important role in the global economy and are typically less studied than the US economy. While the unifying theme for the thesis is economic uncertainty and data quality, the papers focus on different topics, covering growth decomposition, consumer expectations and household saving, and issues related to measuring forecast uncertainty.
Supervisor: Professor Karsten Staehr (TalTech)
Opponents: Mariarosaria Comunale, PhD (Bank of Lithuania) and Associate Professor Lenno Uusküla (University of Tartu).
Results of the RITA2/103 project “Impact assessment of annual report submission timeliness for the Ministry of Finance”
On the 14th of December 2020, Laivi Laidroo introduced the results of a study carried out by a 15-member team from the Department of Economics and Finance and Business Administration.
The aim of the project was to identify the causes and consequences of non-submission and late submission of annual reports and to determine the most suitable and effective solutions that would motivate entrepreneurs to submit annual reports by the deadline. To achieve this aim an analysis of over 1.5 million observations was undertaken, Paavo Siimann and Mari Avarmaa managed 26 interviews with experts and Merle Küttim was in charge of a survey with more than 800 respondents.
The final report of more than 200 pages provides a thorough overview on the submission of annual reports during 2010-2018 by legal persons registered in Estonia. It also contains an overview of the consequences of untimely submission of annual reports, the causes for non-submission and late submission. The report provides an overview of the practices in the field in Finland, Belgium, Germany, and the UK as well as of the possible instruments/methods for improving the situation in Estonia.
The analysis shows that during the investigated period:
- Nearly a quarter of annual reports have not been submitted.
- Nearly 40% of all filed reports have been filed after the deadline and over half of the late-filers have been late by more than 71 days.
- Greater problems have been observed amongst legal persons that are younger, smaller, located in Tallinn, who have been non-filers and late-filers on earlier years, are not liable to value-added tax or have failed to pay taxes on time.
- Less than 1% of late-filers have received a fine warning or a fine.
In order to improve the situation, it is recommended to support timely submission of annual reports through preventive measures. These include the automatic reminders by e-mail, distribution of additional information about the importance of the process and deadlines through public and private sector representatives or social marketing campaign. In addition, it would be possible to pressure legal persons to submit their annual reports if they apply for financial aid provided by the state, submit a bid at a tender or want to get value-added tax refund. Still, compared to current practice, it would be important to improve the efficiency of punitive measures.
More details on the results of the study and recommendations are available in the summary of the report available here (in English).
2020 Emerald Literati Award to the Hazak, Ruubel & Virkebau paper
Emerald Publishing has recognised with the 2020 Emerald Literati Award: Highly Commended Paper the publication "When would creative R&D employees like to work?" by Professor Aaro Hazak, Dr Raul Ruubel and Marko Virkebau - one of the three papers published in the past year in the International Journal of Organizational Analysis by Emerald Publishing that received the award.
Raul Ruubel defended his PhD thesis
Raul Ruubel defended on 23 November 2020 his PhD thesis "Working Schedules and Efficient Time-Use in R&D Work", supervised by Professor Aaro Hazak and Professor Kadri Männasoo.
The opponents were Professor Michael Burda from Berlin Humboldt University and Professor Michiru Nagatsu from the University of Helsinki. The thesis is based on three published journal papers, addressing the heterogeneity of preferences of R&D employees for working schedules and their misalignment with actual and contractual working time, and some time-related aspects of job autonomy that may contribute to human capital being used more efficiently in knowledge work.
Congratulations to Raul Ruubel!
Prof Kadri Männasoo leads the EEA Baltic research cooperation team in Estonia
The second (Lithuanian round) of the EEA Baltic Research Programme funded the research proposal submitted by Vilnius University titled „Micro-level responses to socio-economic challenges in face of global uncertainties“ (Global2Micro). The project aims to achieve a deeper understanding of how societies adjust their behaviour in the uncertain and evolving environment caused by events such as an increased concentration on domestic matters and engagement in trade wars by the US, the British decision to leave the European Union and an increase in global political and economic power by China, as well as current pandemic and global lockdowns.
The duration of the project is 3 years (01.01.2021-31.12.2023) and it is coordinated by Vilnius University. The consortium partners in addition to Tallinn University of Technology, are BI Norwegian Business School, Baltic International Centre for Economic Policy Studies (BICEPS), University of Tartu and Hong Kong University of Science and Technology.
The TalTech project team involves professors Kadri Männasoo (Project Leader) and Aaro Hazak and PhD students Heili Hein, Artjom Saia and Helery Tasane.
In total, 79 applications were submitted at the second round of the EMP, out of which 11 were approved.
Guest Lecture by Jaanus Kroon on 5 November 202o
TheDepartment of Economics and Finance and the Department of Law organised an open lecture under Erasmus+ Jean Monnet Module „The Economic and Legal Evaluation of Digital Ecosystems in the EU“ (ELEDEEU). The lecturer was Jaanus Kroon (Bank of Estonia, Head of the Statistics Department) who gave presentation titled „Bank of Estonia experience in using big data for official statistics“.
The event took place on November 5, 2020 from 16:00 to 17:30 in room SOC-313 and also virtually on MS Teams.
Jaanus Kroon has been working at Eesti Pank since 1993 in different areas of central bank statistics as an economist and head of division, and since 2013 he has been the head of the Statistics Department. He holds Master’s degrees in Economics (M.Sc) and in Organization and Management (MBA) from Tallinn University of Technology (TalTech). Jaanus Kroon represents Eesti Pank in several international committees, notably the Statistics Committee of European Central Banks, the Irving Fisher Committee, and the Committee of Monetary, Financial and Balance of Payments Statistics.
TV interview by Prof Aaro Hazak on time regulations and economic performance
On 1 November 2020, Prof Aaro Hazak gave an interview to Estonian Television news on the economic effects of altering between summer and winter time, and linkages between flexible working time and productivity. Individual heterogeneity in responses to regulations are investigated under the Horizon 2020 project Individual Behaviour and Economic Performance (IBEP; https://www.taltech.ee/en/ibep) in cooperation of Tallinn University of Technology and Helsinki, Aalto and Tel Aviv Universities economists and medical researchers.
Lecture by Prof Aaro Hazak at the University of Helsinki
Professor Aaro Hazak gave an online guest lecture at the University of Helsinki on complexity and evolutionary patterns in economics on 29 October 2020. The lecture is part of the cooperation with the University of Helsinki under the Horizon 2020 project IBEP, focussed on the linkages between individual behaviour and economic performance under complexity and evolutionary change in the economic system.
Guest Lecture by Katrin Nyman-Metcalf on 29 October 2020
The Department of Economics and Finance and the Department of Law organised an open lecture under Erasmus+ Jean Monnet Module „The Economic and Legal Evaluation of Digital Ecosystems in the EU“ (ELEDEEU). The lecturer was Katrin Nyman-Metcalf (Adj. Professor at TalTech Law School, and Head of Research at e-Governance Academy) who gave a presentation titled "Will states be rendered irrelevant in the digital ecosystems of giants?"
The event took place on October 29, 2020 from 17:30 to 19:00 in SOC-415 and also virtually on MS Teams drawing more than 50 students from various disciplines.
Abstract: Human rights are rights that all humans have, primarily vis-à-vis the state. The state must not violate our rights and furthermore must protect us against violations by private parties. The legal system provides states with various tools to fulfil this role, including legislation setting out the limits for what can or cannot be done, police forces with the rights to enforce rules, courts that will determine how laws should be interpreted, and so on. Each state can act in its territory and in some other instances where it may have jurisdiction, based on rules of international law. Then, internet came...The lecture will discuss whether we can still expect the state to protect us by creating norms for what is acceptable, enforcing norms, and providing us with tools of protection against others. Who decides what is ethical content on YouTube? Is Facebook responsible for our privacy? Where does Google have jurisdiction?
Professor Aaro Hazak on Estonian Television
Interview with Professor Aaro Hazak was broadcast on Estonian Television news on 12 October 2020 to comment on the work of the 2020 Nobel Prize winners in economics Professor Paul Milgrom and Professor Robert Wilson.
Speech by Professor Kadri Männasoo at the ′′Culture as Capital′′ conference
Professor Kadri Männasoo gave a speech on the topic of ′′Well-being, work and economic development′′ and participated in the discussion roundtable ′′Culture, Capital and Homo Economicus" on 10 October 2020 at the conference ′′Culture as Capital′′ that brought together for interdisciplinary knowledge transfer various culture and economics people. The event was organised by the Estonian Culture House at Hilton Tallinn Park Hotel Conference Center.
Research paper by Tarvo Vaarmets, Kristjan Liivamägi and Tõnn Talpsepp was recognised by Review of Finance
Research paper How Does Learning and Education Help to Overcome the Disposition Effect? by Tarvo Vaarmets, Kristjan Liivamägi and Tõnn Talpsepp was chosen as one of the Review of Finance’s best investments papers of the year 2020.
Tarvo Vaarmets, for whom the research paper was also an important part of his PhD thesis, commented: “Half-jokingly it could be said that the investors at the Tallinn Stock Exchange have never soared so high in the scientific arena.” The fact that the article was picked out from the 4% of the papers submitted to the journal that are published in the first place, clearly shows its high quality.
In the research paper, the authors investigate the behavior of investors at the Tallinn Stock Exchange; more specifically, the presence of the disposition effect and its relationship with investor’s intelligence, education and learning abilities. The disposition effect is a widespread behavioral pattern, where investors tend to hold on too long to losing positions and sell winning positions too early.
Tõnn Talpsepp, who led the TalTech research group further explained: “We found that investors at the Tallinn Stock Exchange are also affected by this harmful phenomenon, although higher intelligence and education levels decrease the effect. Educated investors are also more capable of learning, and therefore can improve their investment outcomes.”
In addition, Liivamägi, Talpsepp and Vaarmets share the practical implications of their research and long-time experience in the field of finance in their recently published book “Rahaedu põhimõtted” (“Key principles to financial success”) which is directed to the Estonian readers. The aim of the book is to help people make better financial decisions and thereby achieve financial success.
Signe Rosenberg defended her PhD thesis "Essays on Housing, Monetary Policy and Consumption"
Signe Rosenberg, PhD student at the Department of Economics and Finance, defended her PhD thesis "Essays on Housing, Monetary Policy and Consumption" on 19 August 2020.
Supervisors: Professor Karsten Staehr (TalTech), Associate Professor Merike Kukk (TalTech) andAssociate Professor Lenno Uusküla (University of Tartu; Bank of Estonia).
Defence committee: Professor Kadri Männasoo (TalTech), Professor Aaro Hazak (TalTech), Associate Professor Karin Jõeveer (TalTech), Postdoctoral Researcher Rachatar Nilavongse (TalTech) and opponents: Associate Professor Konstantins Benkovskis (Stockholm School of Economics in Riga; Bank of Latvia, Latvia) and Aleksei Netšunajev (Finestmedia Ltd., Estonia)
Horizon 2020 project "Individual Behaviour and Economic Performance: Methodological Challenges and Institutional Context"
Horizon 2020 project "Individual Behaviour and Economic Performance: Methodological Challenges and Institutional Context" (IBEP; project leader Aaro Hazak; funding 900,000 EUR) grant agreement was signed yesterday. The project is led by Tallinn University of Technology in collaboration with internationally leading counterparts Aalto University, University of Helsinki and Tel Aviv University, and aims at generating a better understanding of linkages between individual behaviour and economic performance. Economic outcomes of prevalent individual differences in cognitive capacity and neurophysiology as well as in beliefs and preferences warrant further investigation. Moreover, better designed economic policy and institutions, which take into account that people are different and their wellbeing responds differently to any given policy measures, leads to better utilisation of human capital endowment and enhanced economic performance. The project is a joint effort of economics, finance, practical philosophy and neuroscience scholars, where several internationally highly renowned professors work under a comprehensive set of networking and capacity building activities together with established and early stage researchers in a stimulating multidisciplinary setting. Several joint doctoral courses and seminars, conferences, summer schools and supervising/advising activities are scheduled in 2020-2023.
ECEE summer school on Forecasting with DSGE Models
We had the pleasure to host from 10-12 June 2020 online ECEE summer school on Forecasting with Dynamic Stochastic General Equilibrium Models with Michał Rubaszek, Associate Professor and the Head of the Financial Markets Modelling Unit at Warsaw School of Economics as the course instructor. The online summer school gave a fruitful opportunity for over 20 participants from TalTech, Project IKID South Asian partner universities, University of Melbourne, University of Rostock, Örebro University, University of Tartu, Warsaw School of Economics, American University of Beirut, Lincoln International Business School, Eesti Pank and Bank of Latvia to gain valuable knowledge on DSGE modelling. This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 734712.
TalTech rose in the QS Economics and Econometrics Rankings
Every year, QS publishes the rankings of leading universities in 48 subject areas. The rankings are based on research citations and surveys conducted among the employees and academics.
We are now ranked 351-400 in the prestigious QS World University Rankings for Economics and Econometrics 2020 list. TalTech is the only Estonian university included in that subject list.
E-course "Fundamental of Business Mathematics" was awarded the HITSA e-course quality label
Since 2008, HITSA has been recognizing the work of outstanding e-course authors by awarding the e-course quality label. In the 2020 round, the e-course Fundamentals of Business Mathematics, authors: Kirsti Rumma, Hakan Berber and Jelena Matina, from the Department of Economics and Finance was among the award winners.
Nominated academics at the Spring Banquet 2020
This year the traditional Spring Banquet organized by the Student Council of the School of Business and Governance took place electronically on Facebook. Spring Banquet is a festive event to recognize and reward academic staff who are nominated and voted best by students in various categories.
The academics of the Department of Economics and Finance were awarded in several categories:
Kristjan Liivamägi – Lecture Guru 2020
Kirsti Rumma – Sunshine of School of Business and Governance 2020
Avo Org – The Living Legend
The academics are very grateful for the recognition. Congratulations and have a successful end of the school year!
InWeGe research group presented their research at the NBER Conference in Washington
Professor Tairi Rõõm and Associate Professor Merike Kukk from TalTech Department of Economics and Finance participated in National Bureau of Economic Research (NBER) Conference in Washington DC (5-6.03.2020). They introduced their research about the assets gap between gender in Estonia. The conference focused on income and assets distributive differences in European countries and the U.S. using different methods to measure division of income and assets and the changes of them in various socio-demographic groups.
Professor Kadri Männasoo and Kaido Kepp participate in the OSKA expert panel
Professor Kadri Männasoo and finance lecturer and expert Kaido Kepp from the Department of Economics and Finance participate in the OSKA programme expert panel on the banking and insurance sector.
The OSKA programme (https://oska.kutsekoda.ee/en/), implemented by the Estonian Qualifications Authority, provides decision support to the Government of Estonia for adjusting the sectoral education and training systems to the needs of the labour market. OSKA divides the Estonian economy into 24 sectors, one of which is the banking and insurance sector.
The Estonian Qualifications Authority will consolidate the proposals suggested by the expert panels regarding labour skills development and present them to the employer unions, educators and to the Government of Estonia for policymaking purposes.
Project IKID on the CORDIS news portal
Articles on Project IKID activities have been published in six different languages on the CORDIS European research news portal:
Guest lecture by Meelis Kitsing under the auspices of the Jean Monnet project on 11 February 2020
The Department of Economics and Finance organised an open lecture under Erasmus+ Jean Monnet Module „The Economic and Legal Evaluation of Digital Ecosystems in the EU“ (ELEDEEU). Dr. Meelis Kitsing from the Foresight Center at the Parliament of Estonia gave a presentation titled Scenarios for Digital Platform Ecosystems and Estonian Digital Governance.
This presentation explores the role of governance in digital platform ecosystems and potential future developments. It makes four contributions. First, the concept of digital platform ecosystem is introduced instead of platform economy. Second, the future of digital platform ecosystems is explored on the basis of scenario planning which allows to consider alternative future trajectories rather than rely on extrapolation of current trends. Third, presentation compares different digital governance scenarios developed by international and national organizations which also highlight potential futures for digital platform ecosystems. Last but not least, five Estonian digital governance scenarios are discussed in the context of actual policy making. This reveals that the trend is towards centralization of digital governance in Estonia rather than towards decentralized networked governance approach.
New courses started as part of the Jean Monnet ELEDEUU project
Jean Monnet project “The Economic and Legal Evaluation of Digital Ecosystems in the EU“ (ELEDEUU) aims to encourage academic discussion on digital ecosystems and raise awareness about the legal and economic aspects of digitalisation.
The activities under the project include interdisciplinary courses with guest lectures, roundtables and teamwork between students from different fields.
On spring semester 2020, two new courses started:
Special Topics in Digital Ecosystems I (MEX3010)
Special Topics in Digital Ecosystems II (MEX3020)
More information at the Jean Monnet project website
Professor Kadri Männasoo gave a presentation under the auspices of the Jean Monnet project
Professor Kadri Männasoo gave a presentation on the linkages between digital skills and labour market effects in European countries under the auspices of the ERASMUS+ project ELEDEEU 2019-2022 „Euroopa Liidu digitaalsete ökosüsteemide majanduslik ja õigusalane hindamine“ ("The Economic and Legal Evaluation of Digital Ecosystems in the EU“).
According to the research results, individuals’ digital capacity improves their labour market outcomes and increases labour productivity at the regional aggregated level. The results were presented at the international conference „8th Dialogue on Social Market Economy” (Tartu, 31 January – 1 February 2020) which focused on the role of education in different economic systems.
More information at the Jean Monnet project website.
Project „The Economic and Legal Evaluation of Digital Ecosystems in the EU“
Jean Monnet teaching and research project on digital ecosystems was approved by the European Commission and received the Commission’s funding for 2019-2021. The project leaders are Professor Kadri Männasoo from the Department of Economics and Finance and Professor Tanel Kerikmäe from the Department of Law.
The project which is titled “The Economic and Legal Evaluation of Digital Ecosystems in the EU“ aims to encourage academic discussion on digital ecosystems and raise awareness about the legal and economic aspects of digitalisation. During the project, a study module and a digital platform for supervising students’ research papers will be designed. The project enables students to partake in thescientific work of TalTech’s researchers, including the results of international collaborative projects on European digital systems.
Additional information: Hakan Berber (project coordinator)
Tarvo Vaarmets defended his PhD thesis "Investor Decisions and the Path to the Stock Market"
Tarvo Vaarmets, PhD student at the Department of Economics and Finance, defended his PhD thesis "Investor Decisions and the Path to the Stock Market" on 19 November 2019.
Supervisor: Senior Researcher Tõnn Talpsepp (TalTech)
Opponents: Professor Matti Keloharju (Aalto University, Finland) and Associate Professor Fabio Filipozzi (Estonian Business School, Estonia).
Hakan Berber attended the Jean Monnet Biennial Conference
Hakan Berber, the project coordinator of Jean Monnet Teaching and Research Project on Digital Ecosystems funded by the European Commission, attended as a panel speaker in the Jean Monnet Biennial Conference and closing event of the 30th anniversary, in Brussels on 19th of November 2019.
The Closing Conference of the 30th anniversary of the Jean Monnet Activities began with the kick-off meeting organised by the Education, Audiovisual and Culture Executive Agency (EACEA) for coordinators of newly selected Jean Monnet beneficiaries.
The topic of the conference – “EU studies in the digital age" has been selected as one of the main priorities of the new Commission is to support the development of digital competences through education. The discussions focused on the challenges of digitalisation within education:
• Teaching Europe in the digital age,
• Jean Monnet projects on digital research,
• The European Commission’s Digital Education Action Plan and more in general
• The socio-economic and legal implications of digitalisation.
More information is available at: https://ec.europa.eu/programmes/erasmus-plus/events/30-years-jean-monnet-activities-eu-studies-digital-age_en
Professor Kadri Männasoo presented her research in the United States
On 14 November 2019, Kadri Männasoo presented the results of her research on the topic of “Wage and Working hours: Gender perspective” as a part of the Indiana University (IUPUI) Robert Sandy Economics Seminar Series (https://liberalarts.iupui.edu/econ/pages/seminars-and-workshops-folder/index.php ).
The research examines the non-linear effect of working hours to hourly wages and also, how wage distribution and weekly working hours distribution jointly explain the gender gap in the US hourly wage. The analysis is based on the data from the 2015 American Working Conditions Survey.
The first findings of the recently launched project were lively debated and the research will be further elaborated in consultation with IUPUI economists. The seminar was also streamed live in economics department research network including more than 80 members.
Project IKID is among the success stories of European Commission funded projects
Project IKID (Institutions for Knowledge Intensive Development: Economic and Regulatory Aspects in South-East Asian Transition Economies) was selected as a success story at the European Commission's research and innovation portal.
The project, led by Aaro Hazak, Professor of Institutional Economics at the Department of Economics and Finance, focuses mainly on the transition economies of Cambodia, Laos and Vietnam. In addition to TalTech's economics and law researchers, project IKID includes several partner universities: Lausanne University in Switzerland and the leading universities of Cambodia, Laos and Vietnam in the fields of economics and law.
Prof Aaro Hazak teaching at Berlin Humboldt University summer school in Cuba
Professor Aaro Hazak taught an intensive course on Development Economics as part of the Berlin Humboldt University 17th International Summer School in Economics and Management at the University of Havana. His course was among the most popular ones among the summer school participants - half of the over 30 participants of the course were postgraduate students from the Berlin Humboldt University and the other half from the University of Havana Faculty of Economics. Other economics courses at the summer school included International Economic Integration (Prof. Dr. Michael C. Burda, Humboldt-Universität zu Berlin), Welfare Economics and Economic Inequality (Prof. Dr. Bengt-Arne Wickström, Humboldt-Universität zu Berlin), Policy Evaluation - Estimating Causal Effects in Economics (Prof. Dr. Michael Kvasnicka, Universität von Magdeburg) and Panel Data Econometrics (Prof. Dr. Martin Spieß, Universität Hamburg).
Professor Kadri Männasoo is co-leading the joint research project with the OECD “Realising digital dividends in Estonia”
OECD and TalTech Department of Economics and Finance researchers investigate the economic benefits from increased digitalization. The research seeks to answer whether the diffusion of digital technologies and higher digital skills improves individual labour market outcomes and lead to higher productivity on aggregate and firm-level. The project draws on Estonian enterprises data and on pan-European CSIS (Community Statistics on Information Society) survey data.
The study results will feed into the 2019 OECD Economic Survey of Estonia and TalTech’s project on the “Impact of Investments and Digital Empowerment on the Economy’s Productivity and Competitiveness” (European Union’s Horizon 2020 research and innovation programme under the Marie Skłodowska-Curie grant agreement No 734712, “Institutions for Knowledge Intensive Development: Economic and Regulatory Aspects in South-East Asian Transition Economies”)
The project heads are Jon Pareliussen (OECD) and Kadri Männasoo (TalTech).
Research Group Headed by Laivi Laidroo published “FinTech Report Estonia 2019”
The report, written in cooperation with FinanceEstonia, is the first to provide a complete overview of the Estonian FinTech landscape. To map the development of the sector and the companies operating in it, a thorough analysis of the sector was carried out, along with a survey of local FinTech companies and several interviews with stakeholders in the Estonian FinTech ecosystem. The report captures the sector’s current situation, as well as the most important future trends and biggest challenges facing the companies.
The analysis shows that:
- At the end of 2018, there were at least 84 companies registered in Estonia that could be categorized under FinTech.
- The growth of the sector has been rapid, with two thirds of the companies being established over the past four years.
- Although the business volumes of Estonian FinTechs are still rather modest in comparison to the financial sector as a whole (in 2017 the total assets of FinTechs amounted to 427 million euros), the revenues of FinTech companies reached 235 million euros in 2017. The largest FinTech subsector was deposit and lending.
- FinTech companies are forecasting a three-fold increase in sector revenues in 2019 compared to 2018. Furthermore, to overcome a relatively small domestic market, Estonian FinTechs have set their sights on expanding into international markets and are expecting most of their future growth to come from there.
- Estonian FinTechs value highly the favourable business climate and high levels of digitalization in Estonia, which they view as supportive of FinTech development. At the same time, the scarcity of skilled workers and uncertainty in the regulatory environment are seen as problems.
The finance research group at TalTech will continue to monitor the development of the Estonian FinTech sector in the coming years and wishes to thank all the parties involved in helping in the completion of this report.
The full version of the report is accessible here
Joint strategy day with Aalto University
Aalto University Department of Finance professors, staff and doctoral students visited our department in June 2019 to discuss cooperation plans and research agenda as part of their strategy day. Mutual interest in behavioural and institutional research topics, collaboration in PhD studies and supervising, and research data sharing provide excellent opportunities to continue cooperation and networking between Aalto and TalTech.
Prof Aaro Hazak presented his research at the Institutional and Organizational Economics Academy in France
Prof Aaro Hazak presented the research of his group at the Institutional and Organizational Economics Academy [Read more] (IOEA) in France. The paper "Work arrangements, circadian rhythms and happiness in creative R&D employees" is co-authored with PhD student Heili Hein and Senior Lecturer Marit Rebane. IOEA is an annual key event in institutional economics, hosting this year Nobel Prize laureate Prof Eric Maskin, President of the Society for Institutional and Organizational Economics Prof Francine Lafontaine and many other prominent speakers.
Photo: Lecture by Nobel Prize laureate Prof Eric Maskin
Simona Ferraro defended her PhD thesis “Essays on Education and Labour Economics”
Simona Ferraro, PhD student at the Department of Economics and Finance, defended her PhD thesis“Essays on Education and Labour Economics”on 25 October 2018.
Supervisor: Associate Professor Karin Jõeveer (TalTech)
Co-supervisors: Professor Karsten Staehr (TalTech), Professor Kaire Põder (EBS)
- Associate Professor Kristof De Witte (KU Leuven, Belgium)
- Linas Tarasonis, PhD (Bank of Lithuania; University of Vilnius, Lithuania)
Simona Ferraro with the members of the defence committee (from left Tairi Rõõm, Mari Avarmaa, Merike Kukk, Simona Ferraro, Linas Tarasonis, Kristof de Witte, Aaro Hazak)
Kristjan Liivamägi defended his PhD thesis "Education and Investor Behaviour"
Kristjan Liivamägi, PhD student at the Department of Economics and Finance, defended his PhD thesis "Education and Investor Behaviour" on 18 June 2018.
Supervisors: Associate Professor Tõnn Talpsepp (TTÜ),Professor Mei Wang (WHU-Otto Beisheim School of Management)
- Professor Matti Keloharju (Aalto University, Finland)
- Researcher Kaia Kask (University of Tartu, Estonia)
Kristjan Liivamägi with the defence committee (from left: Mari Avarmaa, Kaia Kask, Laivi Laidroo, Matti Keloharju, Enn Listra, Kristjan Liivamägi, Karin Jõeveer)
Nominated academics at the Spring Banquet 2018
On May 16, Spring Banquet 2018 arranged by the Student Council of School of Business and Governance took place in the atrium of the SOC building. Spring Banquet is a traditional festive event to recognize and reward academic staff who are nominated and voted by students as best in various categories.
The academics of the Department of Economics and Finance were awarded in several categories:
- Kristjan Liivamägi - The Teacher of the Year 2018
- Kirsti Rumma - Fashionista
- Avo Org - Guru of the Lectures
- Ako Sauga - Living Legend
The academics are very grateful for the recognition. Congratulations and have a successful end of the school year!
Estonian Economic Association Annual Conference 2018
On 25—26 January 2018, the Estonian Economic Association held theEEA's Annual Conference“Educational Economics and Governance: From kindergartens to life-long learning”in Tallinn and in Toila. The keynote speaker at the opening event was the Nobel Prize winner Bengt Holmström, whose research focuses on motivating employees and contractual partners.
Several researchers from the Department of Economics and Finance presented their papers at Toila Spa Conference Centre:
- “How Good Is University: Teacher, Peer and Location Effects” Lenno Uusküla, Karin Jõeveer
- "Testing Economic Restrictions in Heteroskedastic Structural Vector Autoregressions" Aleksei Netsunajev, Eesti Pank (co-authors L. Winkelmann ja T. Wozniak)
- "Income Underreporting by the Self-employed in Europe: A Cross-Country Comparative Study” Merike Kukk, Tallinn University of Technologyand Eesti Pank (co-authors A. Paulus & K. Staehr)
- "Firm Capital Structure in Europe: Comparative Analyses of CCEs vs. Western Firms in Changing Financial Environment” Karin Jõeveer, Tallinn University of Technology
Nobel prize winner Bengt Holmström giving a talk on the topic "Beyond Pay for Performance"
Peeter Maripuu defended his PhD Thesis on 5 December 2017
Peeter Maripuu, PhD student at the Department of Economics and Finance, defended his PhD thesis "Cyclicality, Corporate Investments and Financial Soundness: Evidence from Central and Eastern European Countries"on 5 December 2017.
Supervisors: Prof Kadri Männasoo and Prof Aaro Hazak (TTÜ).
- PhD Mikko Mäkinen (Soome Pank)
- PhD Fabio Filipozzi (Eesti Pank)
Marit Rebane defended her PhD thesis at European University Institute
Marit Rebane, lecturer at the Department of Economics and Finance, defended her PhD thesis "The Start of Inequality. Evidence from Italian Time-Use Data." at European University Institute on 28 November 2017.
Supervisor: Prof Fabrizio Bernardi (European University Institute)
- Prof Maria Letizia Tanturri (University of Padua)
- Prof Martin Kohli (European University Institute)
- Prof Jonathan Gershuny (University of Oxford)
Open seminar by the Director of the IMF Europe Office
Mr Jeffrey Franks, the Director of the IMF (The International Monetary Fund) Europe Office gave an open lecture on the topic "Economic Prospects For The Euro Area: Towards a Lasting Recovery?". The event took place on 13 September 2017 and was the first open research seminar of the Department of Economics and Finance this semester.
Click HERE to see all photos.
Lecturer Simona Ferraro presented a paper at an international conference in New York
Lecturer Simona Ferraro participated in the Seventh Meeting of the Society for the Study of Economic Inequality (ECINEQ), which was held in New York on 17-19 July 2017. She presented her article "Is There a Trade-off between Efficiency and Equity in Education?"which is a joint work with Professor Kaire Põder from EBS. The same article received the Vello Vensel Doctoral Research Prize in 2017.
On the picture Simona Ferraro (left) with Nobel Prize-winning economist Joseph Stiglitz (right) who gave a lecture of his recent work “A Simple Model of Wealth Inequality and the Role of Capital Taxation in Overcoming It”.
Prof. A. Hazak presented a paper at an international conference in Toronto
Professor Aaro Hazak presented a paper at the 17th International Conference on Diversity in Organizations, Communities & Nations, held at the University of Toronto Chestnut Centre. Visiting the Estonian House and VEMU and seeing that the Estonian mind, language and culture is kept alive over so many years was a pleasant experience.
Applied economics and finance study programs very popular among prospective students
Prospective students' competition for a study place in the applied economics and finance study programs were among the highest in TTÜ this year - we are glad to see that students appreciate our hard work to develop the programs in cooperation with international partner universities and employers.
More information on SAIS website
Prof. A. Hazak presented a paper at SIOE annual conference in New York
Professor Aaro Hazak presented a paper at the Society of Institutional and Organizational Economics annual conference at Columbia University in New York. The paper, co-authored with Prof Kadri Männasoo (DEF), Prof Markku Partinen (University of Helsinki) and Heili Hein (DEF), discovers the morningness-eveningness pay gap phenomenon.
DEF summer school 2017 was a success, comprising courses on academic publishing skills (Prof Ali M. Kutan, Southern Illinois University, Editor of EMFT), company valuations and financial modelling (Tal Mofkadi, Tel Aviv University), and financial markets and economic performance (Kevin R. James, LSE).
9th international conference Economic Challenges in Enlarged Europe
Department of Economics and Finance hosted the 9th international conference Economic Challenges in Enlarged Europe with 85 participants worldwide. We were glad to host professor Josef C. Brada from Arizona State University as the keynote speaker.
Keynote lecture by Prof Josef C. Brada
The young statistician’s grant was awarded to Birgit Hänilane
On 19 June 2017, Statistics Estonia presented Birgit Hänilane with the young statistician’s grant named after Albert Pullerits.
Birgit Hänilane defended her Master’s thesis “The Impact of the Minimum Wage on Employment in Estonia” at the School of Business and Governance of the Tallinn University of Technology. The aim of the thesis was to evaluate whether the quick increase in minimum wage in 2013–2016 has had an impact on the employment of low-wage earners.The thesis was supervised by Visiting Lecturer Simona Ferraro and Visiting Professor Tairi Rõõm of the Tallinn University of Technology.
Read more on the website of Statistics Estonia.
Ants Aasma published his book "An Introductory Course in Summability Theory"
Ants Aasma, associate professor at Department of Economics and Finance, published a 221-page book together with co-authors Hemen Dutta and P.N.Natarajan. This book is designed as a textbook for graduate students and researchers as a first course in summability theory. The book starts with a short and compact overview of basic results on summability theory and special summability methods. Then, results on matrix transforms of several matrix methods are discussed, which have not been widely discussed in textbooks yet. One of the most important applications of summability theory is the estimation of the speed of convergence of a sequence or series. Until now, no description of the notions of convergence, boundedness, and summability with speed, started by G. Kangro in 1969 could be found in textbooks published in the English language. Finally, this book discusses these concepts and some applications of these concepts in approximation theory. Each chapter of the book contains several solved examples and chapter-end exercises including hints for solution.
Nominated academics at Spring Banquet
On May 16, Spring Banquet 2017 arranged by the Student Council of School of Business andGovernance took place in the atrium of the SOC building. Spring Banquet is a traditional festive event to recognize and reward academic staff who are nominated and voted by students as best in various categories.
The results of the voting show that the academics of the Department of Economics and Finance are highly appreciated by students as they were nominated and awarded in several categories:
- Ricardo Mendes – The Teacher of the Year 2017
- Ants Aasma – Biggest Helping Hand 2017
- Kristjan Liivamägi – The Source of Inspiration 2017
The nominees are very grateful for the recognition. Congratulations and have a successful end of the school year!