Economics and Business Letters

When it really matters: algorithm aversion occurs most often when it is most harmful

Ibrahim Filiz — 2026-05-24

A laboratory experiment is used to test whether algorithm aversion occurs particularly in decision-making situations where serious consequences are at stake. It is shown that the willingness to use an algorithm that is recognizably more powerful than a human expert decreases when the decision is particularly important.

Economic complexity thrives with academic freedom

Vitor Castro — 2026-05-24

Academic freedom allows the development of new and revolutionary ideas, which are expected to lead to innovation and the creation of diverse, unique and complex products. This study explores that relationship empirically and finds that academic freedom boosts not only economic complexity but also technological and research complexity. Hence, academic freedom is fundamental to enhance the development of a country’s productive capacity.

An empirical investigation of corporate culture and productivity using textual analysis approach

Tim Noparumpa — 2026-05-24

We investigate the impact of corporate culture on firm productivity using textual analysis of earnings calls. Employing the Ackerberg-Caves-Frazer (2015) control-function approach and a shift-share instrument exploiting regional social capital, we find a robust positive causal effect. However, this effect is not uniform: productivity gains are driven specifically by innovation and quality. Validation against Glassdoor reviews confirms that innovation measures reflect “lived” culture, while teamwork may represent strategic signaling. The findings suggest that specific cultural attributes, rather than generalized culture, are key drivers of productivity.

Do the regional population traits drive innovation activity?

Ondřej Dvouletý — 2026-05-24

The study provides unique insights into the role of populational prevailing personality traits in shaping regional innovation activity. It covers the period of 2017–2022 and includes fourteen Czech NUTS III regions. The multivariate regression analysis tests the relationship between selected population traits obtained from the 16Personalities survey, specifically Extraverted over Introverted, and Feeling over Thinking and regional innovation activity measured through patent applications and granted patents. The results, also controlled for other previously identified determinants of innovation, show that in the regions with more Introverted and Thinking individuals, the innovation activity, measured by both indicators, is higher. This finding extends the observations from the individual-level studies, showing that these traits are more likely associated with innovation behaviour.

How does social capital encourage entrepreneurship?

Antonio Gutiérrez-Lythgoe — 2026-05-24

This article examines how social capital shapes entrepreneurial activity by analyzing the strength and diversity of social ties across U.S. counties. Drawing on Granovetter’s theory of weak ties, we assess how economic connectedness and social cohesiveness influence entrepreneurship. Using Non-farm Proprietorships from the U.S. Bureau of Economic Analysis as a proxy for entrepreneurship, along with socioeconomic data and Facebook’s Social Capital Atlas, we apply spatial econometrics to reveal patterns of spatial dependence. Results show that economic connectedness—ties across socioeconomic divides—is positively associated with entrepreneurship, while social cohesiveness—dense in-group ties—is negatively related. Our findings support Granovetter’s hypothesis, demonstrating that diverse networks facilitate access to resources and information vital for entrepreneurial activity.

Internationalization and geopolitical risk: impacts on bank profitability and risk

Khanh Duy Pham — 2026-05-24

This study examines the effects of internationalization and geopolitical risk on the profitability and risk of Vietnamese commercial banks, using 549 observations from 2008 to 2023 and applying OLS, FEM, REM, and GMM estimators. Results indicate that both internationalization and geopolitical risk reduce bank risk. However, internationalization negatively affects profitability, while geopolitical risk has a positive impact. The study also highlights the trade-off between profitability and stability in the context of international engagement. These findings provide policy implications for balancing global expansion and financial resilience, offering insights relevant to Sustainable Development Goals (SDGs) 8, 9, and 16.

From genes to goods: understanding climate policy diffusion in the Commonwealth

Viet Anh Tran — 2026-05-24

This letter revisits the relationship between national responses to climate change and genetic distance, which serves as a proxy for biological dissimilarities between countries, as well as the role of trade at both the global level and within a group of countries. Using cross-sectional data from 103 countries worldwide, including up to 23 Commonwealth nations, this study finds that improvements in climate policy are primarily driven by trade integration as an economic intervention tool within this group, rather than by genetic differences. These effects can be explained by differences in income and the importation of environmental goods and services from the UK.

Vietnam's processing and manufacturing industry-energy efficiency and total factor productivity

Thi Thuy Linh Tran — 2026-05-24

This study analyzes the relationship between total factor productivity (TFP) and energy efficiency based on firm-level data from Vietnam’s processing and manufacturing sector during the period 2011–2022. Energy efficiency is proxied by energy intensity, calculated as the ratio of energy consumption to value added. Applying the Generalized Method of Moments for panel data estimation, the study finds a positive association between improved energy efficiency and TFP. Additionally, factors such as the capital-to-labor ratio and firm age positively influence TFP, while inflation has a negative impact. The study recommends policies including enterprise support programs, energy efficiency-linked financial incentives, regulatory measures, corporate governance improvements, inflation control, and maintaining macroeconomic stability to foster TFP growth in the enterprise sector.

What drives ESG pursuit in emerging markets? Evidence from Vietnamese listed firms

Hien Thu Thi Nguyen — 2026-05-24

This study investigates the organisational drivers of ESG pursuit in an emerging market context using evidence from Vietnamese listed firms. Drawing on stakeholder theory and corporate governance literature, it examines the effects of firm size, board characteristics, board gender diversity, digital transformation, and stakeholder engagement on ESG pursuit, as well as the association between ESG pursuit and firms’ investment commitment. Based on survey data from 133 listed firms and applying partial least squares structural equation modelling, the findings indicate that firm size and stakeholder engagement are the most influential drivers of ESG pursuit, while governance attributes and digital transformation play supporting roles. ESG pursuit does not exhibit a statistically significant relationship with investment commitment.