Below is a selection of other projects related to the Department of Economics and Finance. For a full list, see the Estonian Research Information System ETIS. (Link).
Digital Development in Finance
- 2018–2022
- Principal Investigator: Laivi Laidroo
- Funding: 20,000 EUR
Annotation: Technological innovations have speeded up the pace of digitalisation in financial industry. This is challenging the business models of traditional financial institutions and paving way for the FinTechs. Estonian financial sector is one of the leaders in Europe in this transformation. The project aims at mapping the main trends of digitalisation in financial industry in different countries within the EU (including Estonia) as well as identifying the main gaps in scientific research in this rapidly developing area. The project is intended to make preparations for initiating broader scale research projects and to develop a strong team of researchers interested in the topic. This would enable to strengthen the already existing finance research group, increase the visibility of the faculty and contribution to society.
Efficiency in financial sector in light of changing regulatory environment
- 2016–2019
- Principal Investigator: Karin Jõeveer
- Funding: 125,000 EUR
Annotation: The global financial crisis in 2007-2008 showed how the vulnerability in financial sector has a long lasting impact on the real economy. The crisis uncovered weaknesses in financial sector and generated a lengthy and extensive regulatory response. In the proposed research topic we try to identify efficiencies in European banking sector and show how the changed regulations might impact the efficiency. We also study how banking market competition is associated with the risk profile of banks and derive from this policy implications for strengthening the financial sector further. The research will be done based on European banking data (Bankscope database), covering the period 2004-2014. This allows to study the pre-crisis, crisis and post-crisis periods separately.
Towards the Knowledge Economy: Incentives, Regulation and Capital Allocation
- Estonian Research Council personal research grant No. PUT315
- 2014–2017
- Principal Investigator: Aaro Hazak
- Funding 146,000 EUR
Annotation: The role and intensity of knowledge within an economy remains a key success factor for long-term economic growth, increased productivity, competitiveness and socio-economic sustainability. These challenges are particularly important for emerging economies that are yet to catch up frontier knowledge economies. The Project seeks to understand the causes and consequences of the differences in the evolution of knowledge intensity of economies. We aim to identify key micro and macro level incentives for development into a knowledge economy and stimuli for capital allocation into knowledge based investments. Also, we seek to study and outline key channels for efficient regulation that might contribute to knowledge intensification at different levels of an (emerging) economy. The Project would strongly support the development of a team of young researchers and PhD students, and ensure that already achieved progress in their work is sustained.
Project results: Overall, the project achieved the objectives set in the initial application while typically to an exploratory research project, some of the envisaged research paths proved to be more promising. Among other results, our research provides new micro-level empirical evidence on the linkages between economic cyclicality, investments and financial soundness. Access to finance in a downturn and crisis appears to improve the financial soundness of companies, letting them alleviate the higher liquidity risk that comes from long-term investments in enhancing productivity and keep their capacity utilisation stable while still maintaining their productive capital and know-how, including the human capital and tacit knowledge needed for production. In another, interdisciplinary research stream of the project, our findings stress the benefits of flexible work arrangements in creative knowledge jobs in order to account for individual differences and stimulate R&D output. The project provides an improved understanding of some of the key drivers, incentives and propagation channels of knowledge intensification, as well as the resulting challenges and opportunities faced by individuals, companies, and governments. The project outcomes have a high potential for practical application and implementation, for example in terms of improving the management of R&D employees or better assessment of corporate R&D risks. An improved understanding of the causes, mechanisms and challenges in the transmission of knowledge into economic value makes it easier to purposefully plan and foster development of emerging economies into knowledge intensive societies. The results of the project may thus have practical applicability in policy-making and policy debate in Europe, as well as in decision-making in companies. The project has resulted in numerous academic journal papers as well as in popular science outcomes.
Economic crises in Europe: information, risks and government policy
- 01.01.2015–31.12.2015
- Principal Investigator: Karsten Staehr
- Funding: 33,600 EUR
Annotation: The global financial crisis affected all parts of the world, but Europe is the region that has suffered the strongest and most prolonged fallout. This project investigates the volatile economic environment and the crises affecting Europe in recent years. It sheds light on possible causes and consequences of the crises by examining the role of information and risk-taking on financial markets, the linkages between financial markets and macroeconomic performance and the role of government policy at different stages. All studies are empirical addressing contemporary theories or specific hypotheses. The research addresses issues such as financial frictions, pricing inefficiencies, information problems, integration of financial markets, cross-border capital flows, drivers of domestic credit, regulation, monetary measures, government debt dynamics and fiscal policy. The geographical focus is Europe as recent experiences have shown a high degree of interconnectedness of European economies.
Efficiency and equity in matching preschools and children: mechanism design approach (EEMD)
- 2013–2015
- Principal Investigator: Kaire Põder
- Funding: 170,000 EUR
Annotation: Our aim is to work out measures within the framework of modern family policies and interrelate labour market political measures. The result would be a mechanism that allows transparent and equal distribution of publicly provided nursery and kindergarten places. Positive discrimination of less-advantaged families and other political priorities (e.g. minimal walking distance or siblings) are worked out together with experts and partners and implemented as inputs for technical solution. Designed matching mechanism will consider both political priorities and intrinsic features of the mechanism, such as efficiency, equity, strategy-proofness and envy-freeness.