Does ownership matter?
In Finland, there is overwhelming unanimity that the country should be a place that entices companies to do business and people to work. This report seeks to draw attention to one more thing: that Finland should be a good place to own. Foreign ownership is not a problem to the national economy, but lack of domestic ownership is.
Attitudes, tax levels and whether we actually have a functioning capital market, all have impact on the future of ownership.
The Finnish financial market is open to international competition, and both Finnish companies and investors benefit from this. The drift of Finnish companies to foreign ownership too cheaply or at too early a stage is not to Finland’s advantage, but a protectionist attitude towards the buying and selling of companies should not be adopted. The solution is a well-functioning capital market, where supply and demand truly meet.
The Finnish capital market, which has recently developed favourably, is encountering some serious challenges. Finnish interest in investing in Finnish companies is disintegrating. At the same time, Finland’s remote location, the small size of the Finnish capital market, and the small size of Finnish companies on an international scale, is limiting the possibilities and interest of international investors to invest in the Finnish capital market.
Finnish ownership is important, because it guarantees the functionality of the national capital market and, through that, growth and development. Unless ownership is made more tempting, both companies and investors will desert Finland for foreign shores. The guarantee of ownership and a well-functioning capital market should be a key element in a strategy which ensures Finland’s success in the global economy.
This report is written by Professor Vesa Puttonen of the Department of Accounting and Finance at the Helsinki School of Economics.
The report is in Finnish.