Do credit rating actions predict accounting fraud? The answer is yes, according to Allen H. Huang and Shiheng Wang of HKUST and their colleague. Their study also suggests that evidence of fraudulent accounting is strongest when it comes from issuer-paid credit rating agencies (CRAs); their investor-paid rivals are less able to detect fraud signals ... Read More

Limited information sharing between retailers and their suppliers represents a critical bottleneck in the performance of supply chains. Working with a colleague, HKUST’s Hongtao Zhang proposes a novel wholesale pricing mechanism that will benefit both retailers and manufacturers and ultimately enhance supply chain efficiency. “Advances in information ... Read More

Implementing financial sector policies that promote financial inclusion and growth is one of the key goals of developing economies. However, the outcomes are often spatially and temporally uneven. Yan Ji of HKUST and co-researchers develop an innovative model to examine the economic impacts of such policies across space and time, taking as a case study the ... Read More

Structural economic changes over time have increased the value of digital technologies. Recent advances in this area, such as analytics, big data, cloud computing and artificial intelligence, have led nontech firms to follow the tech industry’s lead and invest in digital technologies on a large scale. How has this increased uptake of digital technology ... Read More

Artificial intelligence is no longer just processing language—it’s making decisions. A new study led by HKUST’s Professor Songfa Zhong and his colleagues examines whether large language models (LLMs) like GPT exhibit economic rationality, a fundamental principle in decision-making. The findings? GPT’s choices are not only rational but, in many cases, more ... Read More

Is a “want” superior to a “need” when requesting financial help? Shedding light on this topic, HKUST’s Jaideep Sengupta and colleagues offer insights into the persuasive power of language in crowdfunding appeals. Their study has important practical implications for fundraisers, marketers, and policymakers alike. Although the terms “want” and “need” are both ... Read More

Weather risk, amplified by climate change, is posing an increasingly severe threat to agricultural production. Index insurance is a promising tool to hedge against weather risk, but traditional contracts face key limitations. Tapping into recent advances in machine learning, HKUST’s Zhanhui Chen and colleagues introduce a novel method of managing weather ... Read More

Customers often search for information on products before making their purchase decisions. With the emergence of online review platforms, this has become quicker and easier than ever, such that companies must manage customer search to attract and retain customers. How might the common marketing strategy of bundling—where multiple goods or services are sold ... Read More

Consumers facing increased time pressure have lower levels of attention, according to HKUST scholar Kohei Kawaguchi and colleagues. The researchers explored how consumers’ attention and utility (a measure of product usefulness) are influenced by time pressure and variables such as the number of recommended products. Ultimately, they concluded that “context ... Read More

What should firms do with their patent rights when inventors jump ship? This key managerial question was recently addressed in an elegant study by HKUST’s Yanfeng Zheng and a colleague. With critical implications for firms deciding whether to maintain intellectual property after inventors leave, the authors established and empirically tested a framework ... Read More