Monthly Archives: May 2026

How Farmers Navigate Climate Uncertainty

As climate change increases the frequency of droughts, excessive rainfall, and other extreme weather events, farmers face growing uncertainty about crop production. Understanding how they perceive and respond to this uncertainty can help inform agricultural policy and climate adaptation strategies. A new study from the University of Illinois Urbana-Champaign and Michigan State University explored farmers’ risk preferences in the context of climate-related challenges.

Lead author Natalie Loduca, clinical assistant professor in the Department of Agricultural and Consumer Economics at the University of Illinois, said the study sought to understand better how farmers perceive uncertainty under changing climate conditions. Because crop yields depend on both weather and management decisions, understanding risk attitudes is essential for designing effective adaptation measures.

The researchers surveyed Michigan crop producers, focusing on corn and soybean farmers operating at least 300 acres and relying on farming as a major source of income. Participants completed a series of choice experiments commonly used in economics to measure risk aversion, selecting between options with varying levels of uncertainty and potential returns.

Farmers first evaluated monetary lotteries that contrasted high-risk/high-reward outcomes with lower-risk/lower-reward alternatives. They then considered agricultural scenarios involving management decisions such as investing in drainage systems, irrigation, drought-tolerant seeds, or crop insurance. These options were presented as ways to reduce revenue losses from weather-related events affecting a 40-acre corn field.

The study found that farmers were generally risk-averse in both financial and agricultural contexts. However, attitudes toward uncertainty varied much more widely in the farming scenarios than in the general monetary lotteries, suggesting that a diverse range of perceptions and preferences influences climate-related decision-making.

The findings have important implications for policymakers. More risk-averse farmers may be more inclined to adopt technologies and practices that reduce climate-related yield risks, while farmers with a higher tolerance for risk may respond differently. The researchers are now examining how risk preferences influence actual investment and adaptation decisions, with the goal of better understanding what drives farmers’ responses to a changing climate.

More information: Natalie Loduca et al, Farmer risk preferences: Does context matter? Journal of the Agricultural and Applied Economics Association. DOI: 10.1002/jaa2.70038

Journal information: Journal of the Agricultural and Applied Economics Association Provided by University of Illinois College of Agricultural, Consumer and Environmental Sciences

Researchers Discover Ancient City Prospered During Period of Greater Equality

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New research from the University of York suggests that the 4,000-year-old city of Mohenjo-daro became more equal as it grew more prosperous, challenging long-held assumptions about the rise of early cities. Historians have often argued that as villages developed into urban centres, wealth and power became concentrated among kings, priests, and ruling elites, widening the gap between rich and poor.

However, a new study examining the archaeology of Mohenjo-daro, the largest city of the Indus Valley Civilization, found evidence of the opposite trend. By analysing house sizes throughout the city, researchers discovered that Mohenjo-daro was more egalitarian than neighbouring societies in Mesopotamia and ancient Greece, and became increasingly equal over time.

Lead author Dr Adam Green said legacy data from the city revealed that the gap between the largest and smallest homes narrowed as the city matured. By its later years, levels of inequality had fallen to those typically associated with early farming villages. Unlike ancient Egypt or Greece, where monumental palaces, pyramids, and elite tombs symbolised concentrated wealth and power, Mohenjo-daro invested in practical infrastructure such as organised streets and sophisticated drainage systems.

Researchers also highlighted the widespread distribution of the civilisation’s famous Indus seals, which were used in trade and administration. Rather than being concentrated in palaces or public buildings, the seals were commonly found in ordinary households, suggesting that economic and administrative tools were broadly shared across society. The absence of royal palaces or statues of rulers further points to a society without a dominant ruling elite.

The study suggests that the city’s inhabitants worked collectively to maintain a relatively equal standard of living. Investments in drainage, street maintenance, and a standardised system of weights and measures reflected a commitment to public welfare and fair exchange. Researchers argue that this collective approach may have helped sustain both productivity and social stability over centuries.

Published in the journal Antiquity, the findings challenge the assumption that economic growth inevitably leads to rising inequality. Dr Green said the Indus civilisation demonstrates that urban societies can remain highly productive, technologically advanced, and innovative while also distributing resources and power more equitably. He added that maintaining lower levels of inequality may even have been essential to sustaining long-term prosperity.

More information: Adam Green et al, Inequality declined in the Bronze Age city of Mohenjo-daro, Antiquity. DOI: 10.15184/aqy.2026.10359

Journal information: Antiquity Provided by University of York

Disability-Inclusive Campaigns Drive Stronger Brand Affinity, According to New Research

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Adverts featuring people with disabilities can significantly improve consumer attitudes towards brands and their products, according to new research co-authored by Bayes Business School. The study also highlights the effectiveness of diversity regulations and shows that compliance-driven inclusion can generate the same positive outcomes as voluntary efforts. Although one in seven people worldwide lives with a visible or invisible disability, people with disabilities continue to be substantially underrepresented in advertising.

The research, co-authored by Zachary Estes alongside academics from the University of Amsterdam and Bocconi University, examined advertisements across a variety of products, services, and disability types in both hypothetical and real-world settings. Six studies involving more than 2,000 participants found that consumers consistently responded more positively to brands whose adverts included people with disabilities.

Researchers found that favourable consumer reactions occurred in both public and anonymous settings, indicating that the effect was not driven simply by social signalling. The positive impact of disability inclusion also extended beyond consumer goods to more formal sectors such as financial services. Rather than making brands appear warmer or trendier, disability inclusion primarily strengthened perceptions of inclusivity.

The studies further showed that brands benefited from disability-inclusive advertising regardless of whether representation was voluntary or required by regulation. In one experiment, participants were given differing explanations about why a fictional restaurant included a man using a wheelchair in its advert. Perceptions of inclusivity remained similarly positive whether the inclusion resulted from genuine initiative or regulatory compliance, suggesting that mandatory diversity requirements can still produce meaningful commercial and social benefits.

At the same time, the research identified important factors that can weaken or erase the positive effects of disability inclusion. Advertisements portraying people with disabilities as vulnerable rather than socially integrated were viewed less favourably. Likewise, explicitly drawing attention to a person’s disability within an advert reduced positive reactions. In one study involving autism as an example of an invisible disability, direct mention of the disability eliminated the inclusion advantage.

Participants in earlier studies also demonstrated stronger preferences for brands featuring people with disabilities in adverts for products such as shower gels and energy drinks, even when making private choices without social pressure. Later studies expanded the analysis by providing participants with additional information about brands’ motivations for inclusive advertising and by testing reactions to both visible and invisible disabilities.

The authors concluded that concerns among marketing managers about alienating mainstream consumers or appearing tokenistic are largely unsupported by evidence. More than 80 per cent of participants across the studies responded positively to disability inclusion in advertising. The researchers argue that inclusive campaigns are most effective when they portray people with disabilities as confident and capable participants in everyday life, rather than as vulnerable figures. The study, titled Beyond Visibility: The Disability Inclusion Effect in Advertising, was published in the Journal of Marketing.

More information: Martina Cossu et al, Beyond Visibility: The Disability Inclusion Effect in Advertising, Journal of Marketing. DOI: 10.1177/00222429261447790

Journal information: Journal of Marketing Provided by City St George’s, University of London

AI Detects the Market Signals That Matter Most

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Building an efficient portfolio starts with a deceptively simple question: how do assets move together? In real markets, however, these relationships are never observed cleanly because genuine collective movements are mixed with sampling noise. Even small errors in this risk map can lead to unstable portfolio allocations.

In a study published in The Journal of Finance and Data Science, researchers from CentraleSupélec, University of Catania and University of Palermo developed a neural-network approach that learns how to clean these co-movement patterns before portfolios are constructed. Rather than replacing portfolio theory, the method integrates AI into a transparent allocation framework.

The study focuses on global minimum-variance portfolios designed to control risk. The neural network is trained on the realized risk after allocation, allowing covariance cleaning to be optimized for the portfolio it ultimately produces while keeping the core process explicit and interpretable.

A key idea is that a covariance matrix contains more than pairwise correlations. It also reflects broader collective market patterns. Some capture general market movements, others represent more specific structures, while some are largely noise. Cleaning the matrix means deciding how much confidence each collective pattern deserves before influencing portfolio allocation.

The researchers argue that this principle extends beyond portfolio construction. Whenever a noisy covariance matrix is transformed before guiding a decision, the process can be viewed as correcting collective market patterns. Their neural network learns these corrections while remaining grounded in the mathematical structure of the problem.

The method is designed to respect the symmetries of covariance matrices. Portfolio results should not depend on the order in which stocks are listed or on arbitrary representations of the same risk structure. By incorporating these invariances, the network learns a general cleaning rule instead of memorizing a fixed set of assets.

In out-of-sample tests on U.S. equities from 2000 to 2024, a model calibrated on a few hundred stocks was successfully applied, without retraining, to roughly one thousand stocks. The resulting portfolios achieved lower realized volatility, smaller drawdowns and higher Sharpe ratios than competing covariance estimators, including advanced nonlinear shrinkage methods. These advantages remained in realistic trading simulations that included transaction costs, slippage, exchange fees and financing costs, suggesting that neural networks may be most useful in finance when designed around the symmetries and constraints of the systems they aim to learn.

More information: Christian Bongiorno et al, End-to-end large portfolio optimization for variance minimization with neural networks through covariance cleaning, The Journal of Finance and Data Science. DOI: 10.1016/j.jfds.2026.100179

Journal information: The Journal of Finance and Data Science Provided by KeAi Communications Co., Ltd.

The Paradox of Whistleblower Incentives

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From JPMorgan Chase to Tesla, whistleblowers have become a major force in corporate accountability, exposing issues ranging from misleading disclosures to safety concerns. Regulators have reinforced that role by offering substantial financial incentives, with the U.S. Securities and Exchange Commission awarding whistleblower payouts worth as much as $20 million.

The logic behind those rewards seems straightforward: Larger payouts should encourage more people to report wrongdoing. But new research by Ronghuo Zheng, associate professor of accounting at McCombs School of Business, suggests the relationship is more complicated. Working with Lin Nan of Purdue University, Zheng argues that whistleblower incentives operate within a “Goldilocks” range — too little discourages reporting, but too much may also create unintended consequences.

According to the researchers, excessively large rewards can actually reduce whistleblowing. Their theoretical economic model shows that when incentives become too strong, managers may become reluctant to share sensitive information with employees who could later report problems to regulators. “If the whistleblowing incentive is too strong, it can potentially backfire,” Zheng says.

The dynamic begins when managers uncover defects such as regulatory violations or safety flaws. Under moderate incentive levels, managers still share information internally, allowing employees either to fix the issue or, in some cases, report misconduct externally. But when whistleblower rewards become especially lucrative, employees may be more likely to report issues rather than resolve them internally. Anticipating that possibility, managers may respond by restricting the flow of information altogether.

Zheng points to Theranos as a real-world example of the dangers linked to limited information-sharing. Founder Elizabeth Holmes tightly controlled access to information about the company’s faulty blood-testing technology, making it difficult for employees to understand the scope of the problems fully. The devices later proved unreliable, contributing to patient misdiagnoses, the collapse of the company, and criminal convictions for Holmes and another founder.

Although the study is theoretical rather than based on real-world data, Zheng says the findings carry important implications for regulators such as the SEC. Rather than continually increasing whistleblower payouts, the research suggests incentives should be calibrated carefully — strong enough to encourage reporting, but not so aggressive that they discourage internal communication and prevent problems from being identified and resolved before they escalate into larger crises.

More information: Lin Nan et al, Whistleblowing and Internal Communication, The Accounting Review. DOI: 10.2308/TAR-2024-0036

Journal information: The Accounting Review Provided by University of Texas at Austin

When Location Matters More Than Growth in Investment Returns

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Investors seeking stronger returns may benefit from paying closer attention to where a company is headquartered rather than focusing solely on its growth potential, according to a new study led by researchers at Penn State. The researchers found that portfolios incorporating both company headquarters location and regional housing market conditions generated returns up to three times higher than portfolios focused only on growth stocks.

Published in the Journal of Empirical Finance, the study examined the longstanding “value-growth premium” puzzle in finance — the tendency for value stocks to outperform growth stocks over time. Value stocks generally represent mature and stable companies in sectors such as manufacturing and healthcare, while growth stocks are more commonly associated with rapidly expanding industries such as technology.

The researchers discovered that companies headquartered in expensive regions such as Silicon Valley and New York City face higher labour and infrastructure costs, leaving less money available to generate returns for investors. The findings suggest that regional housing markets may play a significant role in shaping stock performance and investment strategies.

To conduct the analysis, the researchers examined 9,308 companies listed across three major U.S. stock exchanges between 2000 and 2019. Firms were categorized using their book-to-market equity ratio, which compares a company’s assets minus liabilities with its market valuation. Companies with assets valued higher than their share price were classified as value stocks, while firms with higher market valuations relative to assets were categorized as growth stocks.

“There’s a puzzle known as the ‘value-growth premium,’ which refers to how value stocks consistently outperform growth stocks,” said Brent W. Ambrose, professor of real estate and director of the Borrelli Institute for Real Estate Studies at Penn State’s Smeal College of Business. By combining finance, real estate, and urban economics models, the team found that growth firms located in expensive housing markets experienced the weakest returns because they tend to spend more on wages and infrastructure in higher cost-of-living regions.

“Where firms locate their headquarters matters,” said Timothy T. Simin, professor of finance at Penn State’s Smeal College of Business. The researchers noted that while expensive regions can offer advantages such as proximity to innovation and skilled talent, companies and investors should recognize that these benefits may come with lower investment returns. The findings may also have implications for local governments seeking to attract firms, as housing affordability can directly influence labour costs and business competitiveness.

More information: Brent W. Ambrose et al, Firm location and the value-growth premium, Journal of Empirical Finance. DOI: 10.1016/j.jempfin.2026.101690

Journal information: Journal of Empirical Finance Provided by Penn State

Digital Finance Platforms Offer New Opportunities for Small Businesses

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A new study suggests that simple digital finance tools, including mobile money services, may help small businesses strengthen their long-term competitiveness rather than simply improving access to banking services. Led by researchers at the University of East London, the study examined 113 micro, small and medium-sized enterprises (MSMEs) in Ghana and found that businesses gained the greatest benefits when digital finance tools became integrated into everyday operations rather than being used only for transactions. Firms reported improvements in efficiency, customer service and flexibility.

Mobile money services allow people and businesses to send, receive and store money using mobile phones without requiring a traditional bank account. The researchers say mobile phones are increasingly becoming strategic business tools for many small firms, helping them manage finances, reach customers and compete in rapidly changing markets. The study was conducted by researchers from the Royal Docks School of Business and Law together with partners in Ghana.

The findings could have implications beyond the African case study. Across many developing economies, millions of small businesses still face barriers related to banking, credit and digital infrastructure. The researchers suggest that accessible financial technology could help smaller firms compete more effectively, strengthen local economies and improve resilience during economic shocks and periods of uncertainty.

Lead author Godfried Adaba, Lecturer in Business Analytics, said, “Our findings show that digital finance can also become a strategic tool that helps small businesses compete and innovate. The wider lesson is that digital finance works best when it is simple enough for everyday use and deeply embedded into how businesses operate.” The research, published in Global Business Review, also found that ease of use mattered more than many experts had expected, with businesses far more likely to adopt tools they viewed as simple and reliable.

Co-author Francis Frimpong said, “Ease of use is not a minor issue for small businesses. Indeed, it is often the deciding factor. If digital finance systems are too complex or difficult to trust, many firms simply will not use them. That matters globally because it shows that successful FinTech innovation must be about creating tools ordinary businesses can use confidently every day.” The researchers added that policymakers, banks and technology companies should focus not only on expanding digital access, but also on improving usability, trust and digital skills among small business owners.

More information: Godfried Adaba et al, From Inclusion to Advantage: FinTech Adoption and Competitive Strategy Among MSMEs in Ghana, Global Business Review. DOI: 10.1177/09721509261428912

Journal information: Global Business Review Provided by University of East London

Research Suggests Long-Term CEOs Could Hinder Corporate Innovation

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A new study from the University of East London suggests that companies led by long-serving chief executives may become less innovative over time unless strong independent boards balance their leadership.

The research examined 215 FTSE 350 companies over 11 years between 2010 and 2021. Researchers explored how CEO tenure and independent directors influence a company’s “R&D knowledge stock” — the expertise, research capability and technological strength built through sustained investment in innovation.

Published in the journal Corporate Governance, the study found that CEOs who remain in office for many years often become more cautious and less willing to support risky research and development projects. These firms were more likely to reduce investment in innovation and long-term technological growth. However, companies with higher numbers of independent directors were better able to maintain innovation capacity, combining experienced leadership with external challenge and oversight.

The study also found that both experienced CEOs and independent directors became more risk-averse when firms failed to meet performance expectations, suggesting that independent directors do not maintain stable risk preferences during periods of weaker corporate performance. The researchers argue that innovation is shaped not only by technology and finance, but also by leadership culture and corporate governance structures.

Lead author Igbekele Sunday Osinubi, of the Royal Docks School of Business and Law, said long-serving CEOs can bring valuable experience and stability, but may also become overly cautious or too attached to established ways of thinking. He said the findings show that independent directors play an important role in encouraging companies to continue investing in innovation, particularly during difficult periods when firms may otherwise retreat from long-term research and development.

He added that the implications extend beyond individual companies because innovation drives productivity, competitiveness and economic growth. The paper concludes that regulators and policymakers should consider governance reforms and incentives that encourage long-term innovation strategies, particularly in firms led by long-serving executives. The findings may also influence how boards approach CEO succession planning, oversight and the balance between short-term financial pressures and long-term investment.

More information: Igbekele Sunday Osinubi, Long CEO tenure, independent directors and R&D knowledge stock: the moderating effect of performance shortfalls, Corporate Governance. DOI: 10.1108/CG-03-2025-0173

Journal information: Corporate Governance Provided by University of East London

Study Highlights Product-Category Differences in Language Associated with Engagement in Japanese Instagram Advertising

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Research on social media advertising has expanded rapidly in recent years, with much of the existing literature focusing on visual content such as images and videos, as well as platform algorithms that shape advertisement delivery and audience targeting. By contrast, the language used in advertisement copy has received comparatively limited scholarly attention, despite its potential influence on user behaviour and engagement. This gap in knowledge is particularly evident in non-English contexts, including Japan, where linguistic structures, cultural meanings, and communication styles may differ substantially from those examined in English-language studies. Researchers also noted that the same word or phrase may carry different meanings and emotional associations depending on the type of product being advertised, suggesting that the effectiveness of ad copy may vary across product categories.

To explore these issues, the researchers conducted a large-scale analysis of Instagram advertisements posted in Japan between July 2021 and June 2023. The study examined two major product categories commonly promoted on social media platforms: dietary supplements and cosmetics. The final dataset included 12,206 supplement advertisements and 9,486 cosmetic advertisements, providing a substantial sample for examining linguistic trends in digital advertising. By focusing on Instagram, the researchers were able to investigate language use within a highly visual and engagement-driven social media environment where short-form advertising copy plays an important role in attracting user attention and encouraging interaction.

The text from the advertisements was analysed using J-LIWC2015, a psycholinguistic dictionary specifically designed for the Japanese language. J-LIWC2015 categorises words according to psychological, emotional, and semantic characteristics, allowing researchers to quantify linguistic patterns in a systematic manner. Using this approach, the study examined how different language features were statistically associated with click-through rate (CTR), a widely used measure of online advertising performance that reflects the proportion of users who click on an advertisement after viewing it. This methodology enabled the researchers to identify not only which linguistic features were associated with higher engagement, but also how these relationships differed according to product category.

The analysis revealed several notable differences between supplement and cosmetic advertisements. In supplement advertisements, words associated with risk, discrepancies, or problem awareness were positively related to CTR. This finding suggests that supplement advertisements may be more effective when they highlight concerns, deficiencies, or unmet health needs that consumers may wish to address. In contrast, cosmetic advertisements showed a different pattern. Words related to visual perception and appearance, along with language associated with positive emotions and motion, were positively linked to higher CTR. These findings indicate that cosmetic advertising may benefit from language that evokes attractiveness, emotional appeal, and a sense of dynamism or transformation.

Importantly, some linguistic features appeared to function differently depending on the product category being advertised. Motion-related language, for example, was associated with lower CTR in supplement advertisements but higher CTR in cosmetic advertisements. This contrast highlights the importance of considering the broader advertising context when designing social media campaigns. A word or expression that performs effectively in one category may not have the same effect in another. The researchers therefore argue that advertising language should not be treated as universally effective across all products, but rather tailored to the expectations, motivations, and psychological associations linked to specific consumer markets.

Overall, the findings provide large-scale empirical evidence that the relationship between the linguistic features of advertisement copy and CTR varies across product categories in Japanese Instagram advertising. The study contributes to a growing body of research examining how language influences user engagement in digital environments, particularly in non-English contexts that remain underrepresented in social media research. In addition to its academic contribution, the study offers practical insights for marketers and advertisers seeking to improve the effectiveness of social media campaigns. By identifying category-specific linguistic patterns associated with higher engagement, the findings may help organisations develop more targeted and strategically designed advertisement copy for digital audiences.

More information: Kenjiro Inoue et al, The impact of linguistic features on CTR in Instagram ads: A study of supplement and cosmetic products, PLOS One. DOI: 10.1371/journal.pone.0338313

Journal information: PLOS One Provided by University of Tsukuba

Electric Vehicles Offer Financial and Environmental Benefits for Most U.S. Drivers

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Despite regional differences in climate, electricity generation, traffic congestion, and driving habits, electric vehicles generally produce fewer greenhouse gas emissions and do not cost more to own than comparable gasoline-powered vehicles across most of the United States, according to a new study led by researchers at Massachusetts Institute of Technology. The research provides one of the most comprehensive assessments to date of how local conditions and individual driving patterns influence the environmental and financial performance of electric vehicles. By integrating meteorological data, travel behaviour, fuel prices, electricity costs, and regional electricity mixes, the study offers a detailed picture of how electric vehicles perform under real-world conditions.

To capture these variations, the researchers compiled and analysed data from thousands of U.S. zip codes and examined vehicle use at the level of individual drivers. Their analysis incorporated factors such as trip distance, driving frequency, traffic conditions, and acceleration patterns, along with local fuel and electricity prices. Rather than relying on short-term fluctuations in energy costs, the study used time-averaged fuel prices to provide a more stable assessment of long-term ownership costs. The analysis was completed in late 2024 and early 2025 and forms the basis for an updated version of carboncounter.com. This public tool compares vehicle life-cycle emissions and ownership costs for nearly every vehicle model on the market.

The findings show that driving behaviour can influence the emissions benefits of electric vehicles as much as regional factors such as the local electricity grid. In most parts of the country, battery-electric vehicles reduce greenhouse gas emissions by approximately 40 to 60 percent compared to similar gasoline-powered vehicles, with the largest reductions occurring in urban areas. The researchers also found that some common assumptions about electric vehicles in cold climates may be overstated. Although extremely low temperatures can temporarily reduce battery efficiency and driving range, colder weather has only a modest effect on annual emissions benefits. Even under unfavourable winter conditions, electric vehicles still produced substantially lower emissions than comparable combustion-engine vehicles.

The study was led by Marco Miotti, who conducted the work while a graduate student at MIT’s Institute for Data, Systems, and Society, together with senior author Jessika Trancik. According to Miotti, the research was designed to address broad claims often made about electric vehicles, particularly regarding their performance in cooler climates. Rather than asking whether electric vehicles are universally better, the researchers aimed to determine under which conditions and for which drivers electric vehicles offer the greatest advantages. Their results suggest that factors such as local electricity generation, annual travel distance, traffic density, vehicle size, and driving frequency all contribute in roughly equal measure to the emissions-reduction potential of electric vehicles.

The researchers examined both battery-electric vehicles, which operate solely on electricity, and plug-in hybrid electric vehicles, which combine electric batteries with conventional combustion engines. To support the analysis, the team refined existing models that estimate fuel economy and energy use so they could better account for regional climate variability and real-world driving conditions. They also combined national travel survey data with detailed GPS-based driving information using probabilistic matching techniques, allowing them to estimate how drivers behave across different locations and traffic conditions. This integrated modelling approach enabled the researchers to evaluate emissions and ownership costs while accounting for both regional differences and the characteristics of specific vehicle models.

On the financial side, the study found that electric vehicles are cost-competitive with gasoline-powered vehicles in most parts of the United States, even without government tax incentives. In regions where electricity prices are relatively low, battery-electric vehicles often cost less to own over their lifetime than either plug-in hybrid or conventional gasoline vehicles. Looking ahead, the researchers plan to expand their framework to analyse how changing vehicle prices, fuel costs, and electricity systems influence emissions and affordability over time. As electricity grids continue to shift toward cleaner energy sources, they expect regional differences in emissions savings to narrow further, while variations linked to individual driving patterns will remain important.

More information: Marco Miotti et al, Determinants of electric vehicle emissions savings and costs across locations and individuals, Environmental Research Letters. DOI: 10.1088/1748-9326/ae0c23

Journal information: Environmental Research Letters Provided by Massachusetts Institute of Technology

Private School Backgrounds Boost CEO Appeal Without Supporting Evidence

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Investors may be placing too much weight on privilege when judging corporate leadership, according to new research from the University of Surrey. The study, published in the journal European Financial Management, found that companies led by privately educated chief executives tend to experience lower stock market volatility, even though there is no evidence that those leaders perform differently from their publicly educated peers. The findings suggest that investors may interpret elite educational backgrounds as a signal of competence, stability and reduced risk, despite little evidence that such assumptions are justified. Researchers argue that perceptions surrounding socioeconomic status may continue to shape financial markets in subtle but powerful ways.

The study showed that firms run by privately educated CEOs experienced approximately 5 per cent lower stock market volatility on average. However, researchers found no meaningful differences in corporate performance, strategic decision-making, risk-taking behaviour or crisis management between privately and publicly educated executives. In other words, the lower perceived risk associated with privately educated CEOs did not appear to reflect stronger leadership or more effective business practices. Instead, the results suggest that investors may be responding to social and cultural signals linked to elite education and privilege, rather than objective indicators of managerial ability or company fundamentals.

To investigate the relationship between background and investor perceptions, researchers analysed decades of data from publicly traded firms in the United States. Private school attendance was used as an indicator of a CEO’s socioeconomic background, allowing the team to compare companies led by executives from different educational pathways. They examined stock market volatility alongside company performance and key corporate decisions to determine whether privately educated CEOs actually behaved differently. Despite longstanding assumptions that upbringing and social status influence leadership style and risk management, the analysis found little evidence to support those beliefs. Instead, the research points to a disconnect between how investors perceive executives and how those executives actually operate within organisations.

The findings also suggest that investor reliance on social signals becomes especially pronounced during periods of uncertainty. Researchers noted that when markets face higher levels of unpredictability, investors may look for cues such as education, upbringing and social background to guide their judgment. In this context, elite educational credentials may serve as a psychological shortcut, creating an impression of competence and reliability even when there is no measurable difference in outcomes. Importantly, the effect weakened over time as more information became available about a CEO’s actual performance. It also became less pronounced in firms subject to greater analyst scrutiny or higher levels of institutional investment, indicating that better-informed investors rely less heavily on assumptions tied to social background.

Dr Christos Mavrovitis, Senior Lecturer in Finance and Accounting and co-author of the study, said the findings challenge the idea that financial markets operate purely on rational assessments of data and performance. He explained that a CEO’s socioeconomic background can shape how investors feel about a company, even when it has little or no impact on how that company is actually managed. According to Dr Mavrovitis, the study highlights how perceptions of privilege and status continue to influence investor behaviour and market reactions. The researchers argue that the findings provide an important reminder that financial markets are shaped not only by economic fundamentals, but also by human judgment, social assumptions and cultural perceptions of leadership.

More information: Yifei Bi et al, Rich Dad Poor Dad? CEO Private School Background and Firm Risk, European Financial Management. DOI: 10.1111/eufm.70043

Journal information: European Financial Management Provided by University of Surrey

Consumers Value Environmentally Friendly Lobster Harvesting, UMaine Study Finds

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U.S. consumers are willing to pay more for lobster harvested using ropeless fishing technology designed to reduce whale entanglement risks, according to new research from the University of Maine.

The study, led by Qiujie “Angie” Zheng, an associate professor of business analytics in the university’s Maine Business School, found that consumers would pay an average of $3.42 more for a lobster roll made with lobster harvested using ropeless technology when presented with information about animal welfare. Researchers said the findings are intended to explore how consumers might respond if the technology were adopted more broadly in the future, not to suggest Maine’s lobster industry should change its current practices.

Maine’s lobster fishery, which supplies roughly 90% of the nation’s lobster, has already adopted several whale-protection measures over the years, including weak links, sinking lines and reduced vertical line requirements aimed at lowering entanglement risks. The industry remains one of Maine’s most important economic and cultural sectors.

The research comes amid ongoing concern over the endangered North Atlantic right whale, whose population is estimated at 356 whales, including fewer than 100 reproductive-age females. Traditional lobster gear uses vertical lines connecting traps to surface buoys, and regulators and environmental groups have continued debating the extent to which such gear contributes to whale entanglements and deaths.

Zheng collaborated with Kanae Tokunaga, Rodolfo Nayga and Wei Yang to examine consumer demand for ropeless technology and how different messaging strategies influence public support. Researchers found that messages focused on whale welfare and entanglement impacts were most effective at increasing willingness to pay more for lobster harvested using the technology. However, responses varied depending on consumers’ environmental attitudes, animal welfare views and prior knowledge of right whale conservation.

“Right whale conservation is a collective effort,” Zheng said. “In addition to the fishermen, regulators and scientists, consumers play a role, so we hope this research helps understand consumer preferences and evaluations.” She added that the findings provide a foundation for assessing the economic feasibility of ropeless technology and may help Maine’s seafood sector better understand how sustainability messaging shapes consumer purchasing decisions.

More information: Qiujie Zheng et al, Valuation for Lobster Harvested Using Ropeless Technology to Reduce Right Whale Entanglement and Extinction, Marine Resource Economics. DOI: 10.1086/740800

Journal information: Marine Resource Economics Provided by University of Maine