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Government-Funded Study Investigates Role of AI in Enhancing Worker Safety and Product Quality in Manufacturing

Recent developments in artificial intelligence have focused mainly on language models capable of interpreting and generating text. However, AI’s capabilities steadily expand beyond textual applications into sectors such as manufacturing and the service industry. These domains, which often involve manual labour and physical processes, may not initially appear to benefit significantly from AI integration. Yet, a new interdisciplinary study from the University of Notre Dame reveals that AI tools can enhance product quality and worker safety in these environments, opening the door to substantial improvements in industrial practices.

The study, published in the journal Information Fusion, centres on a class of AI systems known as multimodal large language models (MLLMs). Unlike traditional AI models that operate within a single input type—usually text—MLLMs can process and integrate information from multiple sources, such as images, text, and data tables. This capacity enables more nuanced reasoning and decision-making. While most academic investigations into AI’s impact on the workplace have focused on white-collar occupations, the Notre Dame research team aimed to evaluate AI’s potential within industrial and production-based settings, where its adoption has thus far been limited.

To conduct their research, the team collaborated with vocational institutions and trade professionals across Northern Indiana, a region noted for its high concentration of manufacturing jobs. Partner organisations included the Elkhart Area Career Centre, Plymouth High School, Career Academy South Bend, Plumbers & Pipefitters Local Union 172, and Ivy Tech Community College. These partnerships, facilitated through Notre Dame’s iNDustry Labs, allowed researchers to collect real-world weld imagery to assess AI model performance. iNDustry Labs has worked with over 80 regional businesses on more than 200 applied projects, making it a valuable conduit for integrating academic research with industrial needs.

The study specifically focused on the welding practices found in the recreational vehicle, marine, aeronautical, and agricultural sectors. Researchers tasked MLLMs with evaluating images of welds and determining their suitability for various manufacturing applications. While the AI models demonstrated a promising ability to assess weld quality using high-resolution, curated images sourced online, their performance declined when applied to images captured in real-world settings. This discrepancy highlights a significant challenge: models trained on idealised data do not generalise well to messy, unstructured environments that typify most manufacturing floors.

According to Nitesh Chawla, the Frank M. Freimann Professor of Computer Science and Engineering at Notre Dame and founding director of the Lucy Family Institute for Data and Society, this finding emphasises the need to retrain models using actual industrial data and more sophisticated techniques. “This discrepancy underscores the need to incorporate real-world welding data when training these AI models, and to use more advanced knowledge distillation strategies when interacting with AI,” he explained. Such approaches could allow AI systems to assess weld integrity more accurately, thus improving both product performance and occupational safety.

Interestingly, the study also found that the complexity or scale of an AI model did not necessarily correlate with better outcomes. In several cases, performance improved significantly when researchers used context-specific prompts rather than larger or more computationally intensive models. This insight challenges prevailing assumptions in AI development and suggests that customisation and prompt engineering may be more effective than merely scaling up existing systems. As such, the authors recommend that future research focus on equipping AI models with stronger domain-specific reasoning abilities and adaptability.

The implications of this study extend far beyond welding. As industries move towards greater AI adoption, the challenge will be to balance the power of general-purpose models with the practicality and precision of fine-tuned tools tailored to specific environments. Yong Suk Lee, associate professor at Notre Dame’s Keough School of Global Affairs and chair of technology ethics at the Institute for Ethics and the Common Good, stressed the importance of explainability in AI. “As AI adoption in industrial contexts grows, practitioners will need to balance the trade-offs between using complex, expensive general-purpose models and opting for fine-tuned models that better meet industry needs,” he said. Integrating transparent and accountable AI systems will build trust and ensure these technologies benefit the workforce and society.

More information: Grigorii Khvatskii et al, Do multimodal large language models understand welding? Information Fusion. DOI: 10.1016/j.inffus.2025.103121

Journal information: Information Fusion Provided by University of Notre Dame

The right message, in the wrong place, is still the wrong message

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When securing a sale, the most articulate pitch may still fall flat if delivered in the wrong setting. According to new research from Washington State University (WSU), the location of a sales interaction can be just as influential as the content of the message itself. Salespeople may unknowingly alienate potential customers before speaking a single word simply by approaching them in a space that feels too personal or private. This insight challenges the traditional assumption that success hinges solely on persuasive language or product knowledge.

The study, “Psychological Reactance Among B2C Sales Prospects”, published in the Journal of Personal Selling & Sales Management, explores how the physical environment shapes consumer receptivity during business-to-consumer interactions. Conducted by Bitty Balducci and Minjoo Kim, both assistant marketing professors at WSU’s Carson College of Business, the research delves into customer behaviour in different settings—from the public sphere of retail shops to the private domain of homes and members-only lounges. Their findings point to a consistent pattern: people are more likely to reject a sales approach when they perceive the space as private.

The researchers demonstrated this trend across multiple contexts through a series of experiments. In one scenario, participants were less inclined to engage with a product demonstration when approached at home than when the same offer was presented in a store. In another case, those in an exclusive airport lounge exhibited more resistance than individuals in a general terminal. The underlying explanation lies in a psychological mechanism known as “reactance”—a mental pushback that emerges when people feel their freedom is being encroached upon.

As Kim explains, psychological reactance heightens in environments where individuals feel a strong sense of ownership or control, such as their homes or private lounges. When someone enters these spaces with an unsolicited offer, it can feel intrusive, triggering an instinctive desire to protect one’s autonomy. This resistance is less pronounced in public settings, where interactions with strangers are expected and do not evoke the same sense of personal boundary violation. In this way, the same sales pitch can yield vastly different outcomes depending on what is said and where it is delivered.

Interestingly, the study also reveals that physical distance can mitigate this defensive response. When salespeople maintained respectful space—especially in private or semi-private environments—participants reported feeling less pressured and were more open to engagement. Even subtle cues, such as how enclosed or open space feels or how closely a salesperson stands, had measurable effects on customers’ willingness to listen. These small but powerful elements of spatial awareness can make the difference between rejection and receptivity.

The implications for sales professionals are significant. While crafting a compelling pitch remains essential, this research highlights the importance of environmental and psychological context in shaping customer behaviour. By recognising the emotional cues associated with space and autonomy, salespeople can adjust their approach to feel less intrusive and more respectful. Doing so makes them more likely to build trust and achieve better outcomes. As Kim concludes, the setting of a sales conversation is not just a backdrop—it is a critical component of the interaction itself.

More information: Minjoo Kim et al, Psychological reactance among B2C sales prospects, Journal of Personal Selling and Sales Management. DOI: 10.1080/08853134.2025.2479453

Journal information: Journal of Personal Selling and Sales Management Provided by Washington State University

Who Truly Holds the Power in Crypto Governance?

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With Donald Trump’s return to the White House, cryptocurrencies have seen renewed momentum, spurred partly by the administration’s more permissive stance on digital assets. In a notable move, an executive order issued in January barred federal agencies from developing a U.S. central bank digital currency (CBDC), commonly called a “digital dollar.” This action signalled a departure from state-backed innovations favouring private-sector solutions, effectively throwing greater support behind decentralised cryptocurrencies and stablecoins. As regulatory pressure eases, the crypto landscape is entering a transformative phase that has reignited interest in alternative financial models such as Decentralised Autonomous Organisations (DAOs).

DAOs are often hailed as revolutionary institutions capable of delivering a more democratic and transparent financial system. Instead of relying on top-down hierarchies typical of corporations—where CEOs, CFOs, or boards make decisions—DAOs promise community-driven governance. Members participate directly in decision-making by casting votes with governance tokens, digital assets that function like shares. These votes determine everything from fee structures to developmental roadmaps. In theory, this system distributes power evenly among users and reflects the ideal of collective ownership. Yet, the reality appears far more complex and, in some cases, troubling.

Despite their reputation for openness, many DAOs suffer from significant centralisation of power. Governance tokens, the foundation of DAO decision-making, are frequently concentrated in the hands of a small number of early adopters, developers, or investors. Stefan Kitzler, a researcher at the Complexity Science Hub (CSH), explains that while every user has the right to vote, the identities behind wallet addresses remain hidden, making actual participation difficult to assess. “In principle, every user can participate,” he notes, “but it remains unclear who these users actually are, as only pseudonymous addresses are available.” This lack of transparency undermines the democratic image of DAOs and invites scrutiny regarding who controls them.

Kitzler and his team conducted a large-scale study investigating the extent of centralisation in DAO governance. Analysing over 35,000 proposals from 872 DAOs and nearly one million voters, their research, published in Financial Cryptography and Data Security, revealed a stark contrast between theory and practice. In 7.54% of the DAOs studied, core contributors—such as project owners and developers—held enough voting power to decide outcomes unilaterally. Furthermore, in about 20% of these organisations, insiders could pass at least one proposal without broader community involvement. These findings cast serious doubt on the decentralised nature of many DAOs, raising concerns about accountability and fairness.

The 2022 case of Tornado Cash serves as a cautionary tale. Once celebrated as a decentralised privacy-enhancing tool, the platform came under fire when the U.S. government sanctioned it for allegedly facilitating money laundering by North Korean hackers. Two of its developers were later arrested, prompting public debate over the proper level of decentralisation within such platforms. According to Kitzler, “inner circles” in many DAOs suggest that decision-making power often resides with a tight group of influential individuals. Bernhard Haslhofer, head of the Digital Currency Ecosystems research group at CSH, adds that even DAOs managing millions of dollars have shown signs of unilateral control—findings that surprised the research team.

The problem is compounded by the opaque nature of blockchain transactions, which makes it virtually impossible to determine the real-world identities behind extensive token holdings. This anonymity creates vulnerabilities in governance processes, such as potential vote manipulation. The researchers observed instances where tokens were transferred just before necessary votes, suggesting strategic behaviour aimed at swaying outcomes. As cryptocurrencies surge in popularity and policy discussions intensify globally, understanding how DAOs function in practice—not just in theory—has never been more critical. “Our findings provide empirical insights that can help shape future regulations,” Haslhofer concludes, “so that DAOs can live up to their original promise of decentralised, community-led governance.”

More information: Stefan Kitzler et al, The Governance of Decentralized Autonomous Organizations: A Study of Contributors’ Influence, Networks, and Shifts in Voting Power, Financial Cryptography and Data Security. DOI: 10.1007/978-3-031-78679-2_17

Journal information: Financial Cryptography and Data Security Provided by Complexity Science Hub

Digital Transformation Is No Longer Optional for B2B—Adapt or Fall Behind

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Manufacturers that fail to embrace emerging digital technologies are doing more than risking their competitive edge—they are laying the groundwork for eventual failure. This is the central warning from researchers at the University of Surrey, whose latest study underscores the critical importance of digital transformation in the manufacturing sector. In today’s rapidly evolving business environment, adopting digital tools is not merely an option; it is necessary for survival and long-term relevance.

Published in Business Research, the study by academics from Surrey Business School offers a practical framework to guide manufacturers through the complexities of digital transformation. It highlights how emerging technologies can enable firms to deliver superior value by focusing on customer-centric strategies. Rather than placing technology at the heart of innovation, the study urges manufacturers to pivot towards a model that puts customers—particularly in B2B contexts—at the centre of their strategic thinking.

According to the research, embracing specific technologies such as chatbots, digital twins, augmented and virtual reality (AR/VR), digital platforms, and digital product passports allows manufacturers to enhance the customer experience significantly. These technologies have the potential to revolutionise interactions, simplify complex processes, and improve coordination across supply chains. When implemented thoughtfully, they can enable firms to become more agile, responsive, and attuned to the evolving needs of their business customers.

Dr Nima Heirati, Associate Professor of Marketing and co-author of the study stresses the importance of a mindset shift: “To remain competitive in today’s market, companies must learn to place the customer—not products, services, or technologies—at the centre of their strategy, designing every other element of the business around this core mindset.” He further explains that it is not enough to adopt digital tools for the sake of modernisation; their deployment must be strategically aligned with the goal of creating meaningful value for the customer.

To support this alignment, the study introduces a framework categorising technologies into three functional groups: experiential, performance-enhancing, and automated. These categories clarify how digital tools contribute to four critical areas: managing customer relationships, involving customers in co-creating business value, improving internal collaboration, and enhancing partnerships with external actors. Practical applications include using chatbots for efficient customer service, digital passports to provide transparency and traceability, and AR/VR to support customer decision-making by offering immersive product experiences.

Dr Heirati concludes with a firm message for manufacturers: “Adopting a digital-first approach can fall short if managers overlook how emerging technologies reshape the customer journey. As the B2B landscape continues to shift, those who resist these changes will soon find themselves outpaced by competitors who are willing to adapt. The time to act is now. Manufacturers who fail to evolve risk becoming obsolete relics of a bygone era.” The study ultimately serves as a call to action, urging manufacturers to move beyond superficial digital upgrades and commit to a more profound, customer-focused transformation.

More information: Nima Heirati et al, How to use emerging service technologies to enhance customer centricity in business-to-business contexts: A conceptual framework and research agenda, Journal of Business Research. DOI: 10.1016/j.jbusres.2025.115284

Journal information: Journal of Business Research Provided by University of Surrey

Bank Deregulation in the U.S. Has Enabled Widespread Corporate Misconduct

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A new study from the University of Surrey has uncovered troubling consequences arising from the deregulation of the American banking sector. Since the mid-1990s, a loosening of financial regulations has transformed the landscape of corporate earnings management in the United States. The paper, published in the International Review of Financial Analysis, highlights a shift in corporate behaviour resulting from these regulatory changes. Rather than promoting transparency or responsible financial governance, deregulation has inadvertently encouraged corporations to adopt more concerning financial practices.

Central to the study is the observed trade-off between two distinct forms of earnings management: accrual-based (AEM) and real earnings management (REM). AEM alters reported financial outcomes by manipulating accounting assumptions or estimates, such as revenue recognition timing or expense accruals, without affecting the company’s cash flow. In contrast, REM involves adjusting genuine business activities—such as reducing research and development expenditure or overproducing inventory—to influence reported profits. While both strategies aim to present a more favourable financial position, REM has more tangible, and often more damaging, implications for long-term corporate health.

According to Professor Liang Han, the study’s lead author, deregulation has strengthened banks’ market presence and improved their ability to monitor borrowers. However, this increased oversight has not deterred earnings management; it has shifted the focus from AEM to REM. In other words, firms are not engaging in less manipulation—they are simply changing their methods. “While banks are better equipped to monitor financial practices,” Han notes, “the reality is that corporations are now more inclined to engage in risky behaviour that could have detrimental effects on their long-term performance.”

To support these conclusions, the researchers examined a vast dataset of 63,846 financial statements from U.S. corporations spanning several decades. The analysis showed a clear correlation between increased banking deregulation and the strategic shift from accrual-based to real earnings management. As financial institutions gained power and monitoring sophistication, corporations responded by adopting more subtle yet risk-laden tactics. These included cutting vital operational costs and altering business decisions to meet earnings benchmarks without regard for future viability.

The study warns that such shifts pose significant risks to sustainable corporate development and innovation. By its nature, REM sacrifices long-term strategic investments for immediate financial appearance. Cutting research spending or distorting production cycles might meet investor expectations temporarily but often leads to weakened innovation pipelines and volatile performance down the line. These findings echo the lessons of the 2008 financial crisis, where excessive short-termism, enabled by a lack of effective oversight, contributed to systemic instability.

Professor Han stresses the need for caution as deregulation reshapes corporate finance. “As the landscape of corporate finance evolves, it is essential for stakeholders to remain vigilant about the potential pitfalls of deregulation and the necessity of responsible financial practices in safeguarding the economy.” The study calls on policymakers and regulators to consider the broader consequences of financial liberalisation, urging a balanced approach that encourages innovation without compromising the long-term stability of firms and markets.

More information: Liang Han et al, Balancing acts: Bank market deregulation and the dynamics of earnings management, International Review of Financial Analysis. DOI: 10.1016/j.irfa.2025.104040

Journal information: International Review of Financial Analysis Provided by University of Surrey

From Boardroom to Battlefield: CEOs Turn Activist After Exit

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Few phrases are as likely to send shivers down a CEO’s spine as “activist shareholder.” In recent years, investment firms like Elliott Investment Management have demonstrated their formidable influence, successfully pressuring major corporations such as Starbucks and Southwest Airlines to restructure their boards and rethink their strategic operations. These campaigns often make headlines due to their scale and confrontational nature, painting a picture of corporate upheaval led by powerful, well-resourced outsiders.

However, a different kind of activist shareholder is quietly reshaping boardrooms across the corporate landscape. Jonathan Cohn, Associate Professor of Finance at the McCombs School of Business at the University of Texas, refers to them as “quasi-insiders.” These individuals—former CEOs, directors, or founders—retain substantial ownership stakes and possess intimate knowledge of the inner workings of the organisations they once led. Unlike traditional activist investors, who are external to the companies they target, quasi-insiders are deeply embedded in the corporate histories they seek to influence, making their campaigns uniquely personal and often strategically incisive.

Cohn’s latest research, conducted in collaboration with Mitch Towner and Aazam Virani from the University of Arizona, explores the prevalence and impact of quasi-insider activism. Analysing a wide array of third-party datasets and federal financial filings, the researchers identified 327 quasi-insiders involved in approximately 280 public activist campaigns between 1995 and 2021. These individuals were not fringe actors; 38% were former CEOs, 30% were founders, and 21% were ex-directors. Perhaps most notable is their high success rate—43 per cent of these campaigns met their primary objectives, such as securing board representation or influencing corporate strategy. In Cohn’s words, this is a “strikingly high” figure, especially when compared to traditional activism outcomes.

Investors seemed to respond positively to such interventions. On average, the share price of the targeted firms rose by 3.9 per cent in the ten-day window following the announcement of the activist campaign. While the longer-term effects on profitability were less clear and more challenging to quantify, the data revealed no signs that these quasi-insider efforts harmed the financial standing of the companies involved. Cohn suggests that the results challenge common assumptions about shareholder activism, particularly the belief that it is exclusively driven by hedge funds or large institutional investors pursuing short-term gains.

Interestingly, quasi-insider campaigns predominantly targeted smaller firms that were underperforming financially—organisations often overlooked by significant hedge funds due to the limited returns they might yield. In such cases, personal motivation usually plays a pivotal role. One example cited is Destiny Media Technologies, where the ousted founder and former CEO attempted to reclaim influence by nominating himself and four allies to the company’s board. His argument was twofold: that he had been wrongfully dismissed and that current leadership was faltering. Although the effort ultimately failed, it underscores a recurring theme. These campaigns may be as much about personal vindication and unresolved tensions as they are about strategic direction or corporate mismanagement.

Cohn concludes that companies might reduce the risk of quasi-insider activism by maintaining open lines of communication with former leaders, particularly those who continue to hold significant equity stakes. Rather than severing ties entirely, boards might consider ways to constructively engage with ex-CEOs and founders, recognising that their historical insights and emotional investments can, if handled diplomatically, be assets rather than threats. Quoting the timeless advice of Michael Corleone from The Godfather Part II—“Keep your friends close but your enemies closer”—Cohn suggests that a strategic approach to corporate relationships may be just as crucial as any policy or protocol in safeguarding governance stability.

More information: Jonathan Cohn et al, Quasi-Insider Shareholder Activism: Corporate Governance at the Periphery of Control, The Review of Corporate Finance Studies. DOI: 10.1093/rcfs/cfad016

Journal information: The Review of Corporate Finance Studies Provided by University of Texas at Austin

Ultrafast EV Charging in China: Obstacles, Innovations, and Economic Considerations

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A recent study published in Engineering explores the emerging landscape of ultrafast electric vehicle (EV) charging stations in China, offering a detailed examination of usage patterns, grid implications, proposed solutions, and the associated financial costs. As the global EV market continues to expand remarkably—with China at the forefront in adoption—gaining a nuanced understanding of the infrastructure challenges and opportunities is imperative for sustainable growth in this sector.

The research, led by Yang Zhao, Xinyu Chen, and Michael B. McElroy, is grounded in an extensive analysis of real-world charging data from over 15,000 EVs across fast-charging stations in ten Beijing districts. Using this empirical dataset, the team developed a series of future-oriented scenarios that reflect evolving EV specifications and charging behaviours. Key parameters incorporated into the modelling include charging power levels, battery capacities, and charging session durations, all critical to anticipating infrastructural needs.

One particularly significant finding concerns the non-linear relationship between increased charging power and station load. While it might be intuitively assumed that doubling charging power would result in a proportional doubling of station load, the study demonstrates that this is not necessarily the case. In larger charging stations equipped with numerous chargers, the peak power demand rises far less dramatically—by under 30%—even when charging power is doubled. This phenomenon arises because shorter charging durations reduce the probability of session overlap. For instance, in simulation scenarios ranging from S1 to S7, where the maximum EV charging power increased tenfold, the peak load at the airport charging facility only increased by 4.90, underscoring the moderating effect of session timing on load intensification.

To address the challenge of limited power capacity at charging stations, the researchers evaluated two broad mitigation strategies: a dynamic waiting system and integrating energy storage solutions. The dynamic waiting strategy entails staggering specific charging sessions to alleviate peak loads. Notably, at the airport station—where the total capacity is equivalent to 120 kW multiplied by the number of chargers—this approach alone was sufficient to accommodate ultrafast charging needs across all simulated scenarios (S1 to S7), albeit with a manageable increase in waiting times.

In parallel, the study assessed the role of battery-based energy storage systems in absorbing peak demand surges. Although effective, this solution comes at a considerably higher cost. The unit cost of lithium-ion energy storage in China is approximately four times that of conventional pad-mounted distribution transformers. Despite the expense, energy storage offers distinct advantages: It obviates the need for grid capacity upgrades and allows for greater flexibility in station deployment, especially in areas where grid reinforcement is impractical or delayed.

The financial implications of infrastructure upgrades were also a focal point of the study. The chargers themselves and the associated distribution transformers were among the key cost drivers identified. By comparing the costs of various upgrade pathways, the researchers offer a strategic framework for stakeholders—particularly policymakers and utility providers—to optimise investment decisions. Their findings support the establishment of large-scale ultrafast charging stations featuring chargers with power ratings between 350 kW and 550 kW in regions with high charging demand. Such an approach, the authors argue, represents a cost-effective and scalable response to the anticipated surge in EV charging needs.

Overall, this study provides a comprehensive and data-rich perspective on the future of ultrafast EV charging infrastructure in China. Its integration of empirical evidence with forward-looking scenario analysis highlights the complexity of managing high-power charging networks. It presents actionable insights for infrastructure planning, grid integration strategies, and regulatory frameworks. As China continues to lead the global EV transition, studies of this kind will prove critical in ensuring that the supporting infrastructure evolves in a manner that is both economically and environmentally sustainable.

More information: Yang Zhao et al, Future Ultrafast Charging Stations for Electric Vehicles in China: Charging Patterns, Grid Impacts and Solutions, and Upgrade Costs, Engineering. DOI: 0.1016/j.eng.2025.01.015

Journal information: Engineering Provided by Higher Education Press

UC research reveals surprising connection between police budgets and housing market trends

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A new study from the University of Cincinnati has shed unexpected light on the complex relationship between police spending and housing prices—one that had eluded researchers for decades. At first glance, the findings aligned with prior studies, showing little to no relationship between law enforcement budgets and home values or sales volumes. However, a stark contrast emerged when economics professor David Brasington, PhD, disaggregated the data by income levels. The effect of police funding on property prices was not uniform across neighbourhoods but instead showed prominent, opposing trends depending on whether the community was wealthy or low-income.

Published in the Journal of Real Estate Finance and Economics, Brasington’s study, titled “The Effect of Increased Police Spending on House Prices and Sales Volume: A Tale of Two Types of Cities,” offers a fresh and nuanced view. In low-income communities, an increase in the police budget led to a roughly 13% rise in housing prices. In contrast, high-income areas experienced a minimum 14% decline in house prices following the same budgetary increase. These opposing shifts had long gone unnoticed because past studies only examined the average effect, effectively masking the divergent patterns.

According to Brasington, the issue’s core lies in how data was previously aggregated. “The small or nonexistent link between house prices and crime found by the literature really just reflects the sum of large but opposite moves in house prices in different market segments,” he wrote. It was only by splitting the sample into high- and low-income groups that the true nature of the effect became visible. Without this distinction, the opposing movements cancelled each other, creating the false impression that police funding had little impact on housing markets.

Brasington’s analysis focused on Ohio, drawing from decades of local referendums on police funding increases—typically through tax levies averaging a 15% rise in the budget. He then compared those events to housing data from 1995 to 2018. Initially, he aimed to study how police tax renewals influenced sales volumes and pricing. While there appeared to be minimal overall change in the number of transactions, the split data revealed a compelling pattern in property valuations that persisted for at least five years after the votes. The number of homes sold remained unchanged, but perceptions of value—reflected in prices—shifted substantially.

The results suggest that residents in low-income communities prioritise increased police presence, likely associating it with greater security, reduced crime, and improved neighbourhood conditions. These factors make such areas more attractive to buyers, raising demand and prices. In this context, additional police funding functions as a positive amenity, much like better schools or improved public transport might. Brasington interpreted this as evidence that increased police spending in disadvantaged areas is politically popular and economically beneficial to homeowners and residents.

Conversely, the decline in property values within high-income neighbourhoods indicates a different perception. Brasington suggests that residents may feel that law enforcement is already adequately funded or overfunded in these areas. Further budget increases—particularly through tax hikes—represent a net negative. “If you cut police taxes and services, the high-end views that as a good thing,” he said. From this perspective, reducing police levies could increase housing demand due to lower property taxes while constraining supply, thus pushing higher prices. The study challenges simplistic assumptions that policing is uniformly valued across socioeconomic strata.

Brasington advocates for a more refined approach to public policy and housing economics in light of these findings. He argues that this kind of income-based differentiation should be more commonly used in evaluating the consequences of government spending. Furthermore, he notes that other public levies—such as those for education, infrastructure, or healthcare—may produce similarly polarised effects across income brackets. Future research, he suggests, should also explore how these dynamics play out in middle-income communities, which remain an unexamined segment in this study. By highlighting the hidden complexity behind aggregate figures, Brasington’s work calls for more sophisticated policymaking that accounts for local context and varying community needs.

More information: David Brasington, The Effect of Increased Police Spending on House Prices and Sales Volume: A Tale of Two Types of Cities, The Journal of Real Estate Finance and Economics. DOI: 10.1007/s11146-025-10012-z

Journal information: The Journal of Real Estate Finance and Economics Provided by University of Cincinnati

China’s Insider Trading Crackdown Is Misfiring — Here’s What’s Going Wrong

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Stricter insider trading regulations are often touted as a solution to improving market fairness, particularly by preventing corporate executives from quietly profiting from private information before bad news becomes public. In 2017, China introduced a sell-by-plan mandate requiring executives to disclose their intentions to sell stock—a move designed to create greater transparency and curb unfair advantages. However, new research reveals a critical flaw: rather than halting insider trading, some executives have found more sophisticated ways to circumvent the rules.

A study led by Pengfei Ye of Virginia Tech, alongside colleagues from the Shanghai University of Finance and Economics, analysed trading data surrounding the implementation of China’s regulation. Published in the Journal of Accounting and Economics, their findings suggest that while the mandate reduced certain forms of opportunistic trading, it left a significant loophole open. Executives have adapted by scheduling sales weeks in advance, allowing them to offload shares before negative news hits the market – all while remaining ostensibly compliant with disclosure requirements.

The research team applied a difference-in-differences methodology to trading data spanning two years before and after the rule came into effect. They could isolate the mandate’s impact by comparing insider sales against those of unregulated relatives. The results indicated that opportunistic insider trading declined by up to 12 percentage points, signalling some regulatory success. Yet, a troubling new pattern emerged: instead of last-minute trades timed just before damaging announcements, executives began setting up sell plans well ahead of the news cycle, thus preserving their ability to profit discreetly from impending stock declines.

Ye notes that executives with early knowledge of bad news no longer need to engage in frantic, last-minute stock sales. By establishing a selling plan several weeks beforehand, they ensure they have already secured their profits by the time the broader market becomes aware of a company’s deteriorating prospects. Alarmingly, the study found that between 8.8 per cent and 28.2 per cent of these pre-disclosed sales appeared motivated by insider knowledge. Such abuses were particularly prevalent in firms with weak corporate governance structures, suggesting that effective internal oversight is essential in complementing regulatory frameworks.

An even more disquieting revelation from the study was that markets could not distinguish between routine predisclosed sales and those motivated by private information. Ye’s team discovered no meaningful difference in investor reactions to opportunistic versus legitimate sell plans. This inability of the market to detect and appropriately respond to insider exploitation implies that disclosure rules, while well-intentioned, may offer little real protection. Instead, they may unintentionally legitimise insider activity under a veneer of compliance, further eroding investor trust.

To address these vulnerabilities, Ye advocates for a more extended waiting period between the announcement of a sale and its execution. China’s cooling-off period currently stands at only 15 trading days – markedly shorter than the 90 days required under the U.S. Securities and Exchange Commission’s revised Rule 10b5-1. The research indicates that executives often become aware of adverse developments at least 25 trading days before they become public knowledge, meaning the existing cooling-off period is insufficient to prevent opportunistic trading. Extending this window would help narrow the opportunity for exploitation. However, regulators must also tread carefully to avoid imposing constraints on executives who need liquidity for legitimate personal financial reasons.

China’s experience is not unique. Other jurisdictions, including the United States, have grappled with similar issues, where rules designed to control insider trading have inadvertently created new avenues for abuse. Ye’s research contributes to a broader international conversation about how to craft effective insider trading regulations. His findings suggest that stronger corporate governance mechanisms complement statutory rules, as no carefully crafted regulation can prevent insiders from seeking ways around it.

In the end, safeguarding market integrity will likely require a two-pronged approach: more robust legal frameworks combined with enhanced internal company oversight. As financial markets continue to evolve and grow increasingly complex, the challenge for policymakers worldwide will be to stay one step ahead of those intent on exploiting systemic loopholes for personal gain.

More information: Pengfei Ye et al, Sell-by-plan mandate and opportunistic insider selling: Evidence from China, Journal of Accounting and Economics. DOI: 10.1016/j.jacceco.2024.101757

Journal information: Journal of Accounting and Economics Provided by Virginia Tech

Illinois Study Highlights Prairie Grass as a Promising Source for Sustainable Aviation Fuel

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Switchgrass has gripped the soils of the American Midwest for millions of years, but soon, this earthbound prairie grass may take to the skies. New research from the University of Illinois Urbana-Champaign has identified economic and environmental factors that position switchgrass as a promising candidate for sustainable aviation fuel (SAF). With global efforts intensifying to reduce aviation emissions, the potential role of switchgrass could prove transformational.

The Sustainable Aviation Fuel Grand Challenge, launched in 2021, aims to scale SAF production to 35 billion gallons annually by 2050, halving greenhouse gas emissions from aviation. Switchgrass, forecasted to contribute up to 230 million dry tons per year, stands among several purpose-grown bioenergy feedstocks that could help meet this ambitious target. Not only does this perennial species produce abundant biomass, but it can also be harvested annually for a decade or longer without replanting. It demands far less nitrogen fertiliser than traditional crops such as maise and delivers vital ecosystem services, making it a desirable option for sustainable agriculture.

Scientists have long recognised the bioenergy potential of switchgrass. Yet, much of the existing research relied on older, less productive cultivars and smaller experimental plots or did not fully account for necessary fertiliser inputs. Addressing these gaps, researchers at the University of Illinois conducted two new studies in which modern, high-yielding “energy” cultivars were grown at field scale across the Midwest. The research sought to identify the most profitable cultivars for different regions while simultaneously comparing their environmental impacts to those of maise, a traditional bioenergy crop.

D.K. Lee, senior author of both studies and professor in the Department of Crop Sciences within the College of Agricultural, Consumer and Environmental Sciences, explained the rationale behind the work. “All the data that helps us estimate switchgrass suitability for SAF comes from small plot research or older forage-type switchgrass cultivars. We wanted to test high-yielding switchgrass cultivars on a larger scale to provide a more accurate picture of the benefits these new cultivars provide,” Lee stated. Under the leadership of postdoctoral researcher Muhammad Umer Arshad, the team planted three newer energy-type cultivars — Independence, Liberty, and Carthage — alongside two forage types — Shawnee and Sunburst — on marginal lands in Illinois, Iowa, Nebraska, and South Dakota. They tested two fertiliser rates, 28 and 56 kilograms of nitrogen per hectare, significantly lower than the 200 kilograms typically used for maise.

The results, after five years, were compelling. Independence and Liberty cultivars consistently outperformed the forage types in profitability across all locations, although the optimal nitrogen rate varied by site. “In most cases, 56 kilograms per hectare achieved higher yields, but in some sites, 28 kilograms performed better in terms of profit,” Arshad noted. Moreover, the most profitable cultivar differed depending on hardiness zones: Independence excelled in zone 6a, Liberty in zone 5b, and Carthage in zone 4b. These findings suggest that farmers could successfully convert marginal lands into profitable bioenergy production sites within two years with strategic cultivar selection.

Beyond profitability, switchgrass also offers significant environmental benefits. In a companion study led by postdoctoral fellow Nictor Namoi, researchers assessed ecosystem services such as soil greenhouse gas emissions and nitrate leaching from switchgrass fields, comparing them directly with no-till maise fields. Results demonstrated that switchgrass dramatically reduced environmental impacts: nitrous oxide emissions and nitrate leaching were significantly lower, with nitrate leaching decreasing by 80% by the third year. Switchgrass’s reduced nitrogen fertiliser requirements explain this improvement, highlighting the environmental advantage of cultivating purpose-grown energy crops on marginal lands.

While carbon dioxide emissions from switchgrass fields were more than 50% higher than those from maise after the second year, the researchers attribute this to switchgrass’s significantly greater belowground biomass, leading to increased root respiration. However, this apparent drawback may herald long-term carbon sequestration benefits. “When we measure the total biomass of switchgrass, there’s about 10 megagrams of carbon belowground. That’s huge,” Lee emphasised. The extensive root systems of switchgrass support carbon storage and enhance soil health and resilience over time.

Although the current demand for bioenergy feedstocks remains modest, mainly due to low commodity and oil prices, the researchers are optimistic about the future. As global markets shift and renewable energy policies strengthen, switchgrass is well-positioned to enter commercial SAF production. “Our research ensures that we can feed productive cultivars into the SAF production system once the economy and the technology are ready to transition,” Namoi said. With its profitability, environmental services, and adaptability to marginal lands, switchgrass may soon find itself not just rooted in Midwestern soils but soaring through the skies.

More information: Nictor Namoi et al, Field-scale evaluation of ecosystem service benefits of bioenergy switchgrass, Journal of Environmental Quality. DOI: 10.1002/jeq2.70025

Journal information: Journal of Environmental Quality Provided by University of Illinois College of Agricultural, Consumer and Environmental Sciences

The Subtle Power of Negativity in Team Management

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In the corporate world, leaders are frequently encouraged to adopt the “Ted Lasso” approach when engaging with their employees. Ted Lasso, the fictional football coach from the popular Apple TV+ series, remains unwaveringly positive regardless of the circumstances. His style is not merely about being genial or superficially boosting morale. Extensive research spanning several decades has demonstrated that maintaining a positive outlook can enhance the individual performance of team members. This discovery has led many organisations to invest in emotional intelligence training for their managerial staff.

However, new findings from a research team in Texas suggest that incorporating a measured amount of negativity leads to even greater achievements. Crucially, it is not simply the presence of negativity that matters but the timing of its expression and the emotional groundwork laid earlier by the leader. As Constantinos Coutifaris, an assistant professor of management, explains, “When — and which — emotions are expressed by leaders matters for unlocking the potential of team members.”

Working alongside co-author Paul Green, also an assistant professor of management, Coutifaris explored how emotional expressions from leaders influence employee performance over time. While the prevailing wisdom confirms that positive emotions are beneficial, Coutifaris and Green observed that much of the previous research overlooked the importance of timing. Together with Jacob Levitt and the late Sigal Barsade of The Wharton School at the University of Pennsylvania, they conducted two major studies examining how the sequencing of positive and negative emotions influenced performance outcomes.

The first study focused on student-athletes and their coaches at an NCAA Division I sports programme, while the second analysed employees and their managers at a leading consulting firm. Both studies divided the timeline — a sports season and a corporate calendar year, respectively — into three distinct phases: beginning, middle, and end. The researchers discovered that early positive emotions expressed by leaders significantly improved individual performance. Yet, intriguingly, performance improved even more when leaders introduced occasional expressions of negativity during the middle phase.

In the athletic study, 245 varsity athletes assessed the emotional expressions of 86 coaches across a season, rating the frequency of positive and negative emotions on a scale from 1 to 5. In turn, coaches rated each athlete’s performance. The data revealed that a one-point increase in early positive expressions resulted in a 3.3% boost in performance. However, if coaches exhibited above-average negative emotions midway through the season, that increase in early positivity led to a 4.4% improvement — a substantial 33.3% amplification of the effect. In the corporate study, computational linguistics software analysed 9,968 employee reviews, measuring the proportion of positive and negative words used by managers across the year. Again, results showed that introducing occasional negativity during the middle phase enhanced the benefit of initial positivity by a striking 40.8%.

Notably, the balance remained firmly in favour of positivity. In the business study, the median percentage of positive words in early evaluations stood at 5.5%, whereas the median rate of negative words at the midpoint was only 0.5%. In other words, praise continued to outweigh criticism vastly. Nevertheless, the small injection of negativity proved decisive. As Green notes, “The big surprise for me was that negative emotions are pretty valuable. They help people improve.”

The researchers attribute these findings to the psychological phenomenon known as imprinting theory, which holds that early emotional experiences leave a lasting mark on subsequent attitudes and behaviours. In the context of leadership, initial expressions of positivity establish a secure emotional foundation. Subordinates interpret these early signals as indicators of their social worth and respect within the team. Thus, when a leader later introduces critical feedback, it is not perceived as an affront or a withdrawal of respect but rather as a constructive nudge to improve and reaffirm their valued status.

Coutifaris summarises the key practical takeaway: leaders should strive to create a favourable emotional climate at the outset, during the formative stages of a team’s development. Once a sense of belonging and value is securely imprinted, they can judiciously introduce negative feedback midway through the team’s journey to stimulate growth and improvement. “Expressing those positive emotions early allows you, the leader, to use some different emotions at the midpoint to sort of jolt people to perform better and better over time,” he explains. In short, the art of leadership may lie not simply in being positive or critical but in mastering the delicate timing and balance between the two.

More information: Constantinos Coutifaris et al, Timing Is Everything: An Imprinting Framework for the Implications of Leader Emotional Expressions for Team Member Social Worth and Performance, Organization Science. DOI: 10.1287/orsc.2023.17390

Journal information: Organization Science Provided by University of Texas at Austin

Web-Based Tool Analyses Effects of Tax on Sugary Drink Purchases

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Americans have long maintained a deep affection for sugar-laden beverages—not just traditional soda but also sports drinks, energy drinks, and sweetened iced tea. In 2021 alone, the average American purchased around 37 gallons of sugar-sweetened beverages. This translated to an astonishing collective intake of approximately 145,000 calories per day from these drinks. This high level of consumption has alarmed public health experts, given the strong link between excessive sugar intake and chronic conditions such as obesity, diabetes, and cardiovascular disease.

Seeking new ways to address this widespread health concern, researchers at the Fralin Biomedical Research Institute at Virginia Tech Carilion (VTC) have created a first-of-its-kind online platform to simulate how governmental policies — particularly taxes on sugar-sweetened beverages — might alter consumer behaviour. This digital tool, the Experimental Beverage Marketplace, allows scientists to study purchasing patterns in a controlled yet realistic environment. Findings from an initial proof-of-concept study were recently published in Appetite, offering new evidence on the potential effectiveness of beverage taxation strategies.

Dr Jeff Stein, assistant professor and interim co-director of the Centre for Health Behaviours Research at the institute, described the online tool as a critical step forward. “This tool provides a robust opportunity to systematically evaluate the potential effects of tax proposals on purchasing and consumption,” Stein said. “Our aim is to create a strong evidence base so that future food and beverage policies are grounded in research and more likely to achieve meaningful public health outcomes.” The Experimental Beverage Marketplace thus represents an essential innovation in behavioural and nutritional science.

The initial study enrolled 73 participants, all of whom were regular consumers of sugary beverages, were not following any specific dietary restrictions, and served as their household’s primary grocery shoppers. Participants interacted with the online marketplace to complete beverage purchases under different tax conditions. When a tax was applied to sugar-sweetened drinks, participants consistently bought fewer sugary beverages, as measured by fluid ounces, number of items, and total caloric intake. These results aligned with basic economic principles: when the price of a good rises, demand tends to fall.

Haylee Downey, the study’s first author and a doctoral candidate in Virginia Tech’s Translational Biology, Medicine, and Health Graduate Programme, noted the simplicity behind the findings. “In general, people will buy less whatever you tax,” Downey said. “That is a well-established economic theory, and our virtual marketplace allowed us to replicate this concept clearly and effectively.” This outcome confirms that taxation can serve as a viable lever for reducing the consumption of unhealthy products.

Previously, similar experiments had relied on small, physical retail environments explicitly constructed for research purposes. However, such brick-and-mortar models are costly to build, limited in scope, and unable to realistically simulate the wide variety of options available in a modern supermarket. In contrast, the digital marketplace developed by Downey and Stein includes hundreds of beverage options, from individual servings to bulk multipacks, presented through a familiar online shopping interface. Participants reported that the system was user-friendly, supporting its future use in large-scale behavioural studies.

Several American cities — including Philadelphia and Boulder, Colorado — have already implemented taxes on sugar-sweetened beverages, although the rates and specific products targeted vary. Researchers believe that digital tools like the Experimental Beverage Marketplace could help policymakers test and refine proposed interventions before enacting them, thereby anticipating both the intended and unintended consequences. Understanding reductions in sugary drink consumption and possible substitution behaviours is critical for designing policies that promote healthier overall dietary patterns.

Looking ahead, Stein and Downey focus on how consumers adapt when sugary drinks become less attractive through taxation. “Where does the consumption go?” Stein asked. “Are people switching to water, to diet drinks, or are they substituting with other high-sugar products like sweetened cereals?” Addressing these questions will require further modifications to the online tool. Downey is now preparing a second, expanded study, forming the centrepiece of her doctoral dissertation. Ultimately, the researchers hope their work will support more effective public health strategies, leveraging digital innovation to shape healthier futures.

More information: Haylee Downey et al, The Experimental Beverage Marketplace: Feasibility and preliminary validation of a tool to experimentally study sugar-sweetened beverage taxes and beverage purchasing, Appetite. DOI: 10.1016/j.appet.2024.107848

Journal information: Appetite Provided by Virginia Tech