Real business cycle (RBC) models describe how firms make investment and labour decisions. They assume that technological shocks and changes in productivity are the primary drivers of macroeconomic fluctuations. However, these models generally fall short of explaining how choices made within firms—which might modify external shocks—might affect macroeconomic ... Read More

Lowering prices and offering discounts might be a sure-fire way for firms to attract consumers, but these tactics also cause huge fluctuations in competition intensity, with potentially serious implications for asset prices and returns. Surprisingly, however, this key issue has been neglected in asset pricing research. In a pioneering study, HKUST’s ... Read More

Social networks are a good example of the complexity of human relationships, where a person’s daily life decisions are regularly affected by the choices of their friends. This challenges extensive research on the economics of networks, in which individual activities have global impacts on the activities of others. In short, the externalities of network ... Read More

In China, start-ups with high-profile leaders are at risk of becoming victims of government expropriation, HKUST’s Jiatao Li and colleagues have found. This effect is particularly pronounced in areas where income inequality is high, and the legal system is underdeveloped. However, the authors find that entrepreneurs can protect themselves by establishing ... Read More

Counterfeiting costs companies as much as US$600 billion a year, and the situation is rapidly becoming worse. How does counterfeiting affect global supply chains, and how can it best be combated? These were the questions explored by Man Yu and Ki Ling Cheung of HKUST and their colleague—with rather surprising results. They found that the threat of ... Read More

Television advertising plays a crucial role in shaping consumer behavior. It may also have a major influence on investment decisions, according to a novel study by HKUST’s Alminas Žaldokas and his colleague Jūra Liaukonytė from Cornell University. Their analysis of investor behavior revealed an increased interest in a company’s financial records immediately ... Read More

In 2019, there were over 4,700 seed-stage investments globally, along with significant recent interest in how resources are mobilized during the earliest stages of the entrepreneurial journey. Seed-stage startups work towards finalizing their product or services in addition to gathering market data. This also includes finding enough funding to develop an ... Read More

When confronted with a long line of people outside a restaurant, do you join the back of the queue or choose to dine elsewhere? Whilst this may seem like a snap judgment, there is more to the decision-making process than meets the eye. In fascinating work, HKUST’s Ying-Ju Chen and colleagues looked at how patience, service quality information, and ... Read More

With the rise of e-commerce, suppliers can now reach consumers directly through channels such as online platforms. On the surface, it might seem that this “encroachment” can only be detrimental to the traditional retail channel. However, HKUST’s Ying-ju Chen and colleagues reach a different conclusion. In important new work, they show that encroachment may ... Read More

When we fall in love with a product but fail to catch its name, the obvious solution is to search for it online—guided only by our fuzzy recollection of the product and a few general search terms. How likely are we to correctly identify the target product among the many similar items advertised online? In an illuminating study, HKUST’s Sang Kyu Park and ... Read More