Research Roundup: May 2025

Dive into our monthly Research Roundup, showcasing the latest insights from the business education community to keep you informed of new and noteworthy industry trends. Here are this month’s selections:

Innovation in the Age of Remote Work

• Researchers: Bin Wang, Monash University; Saadat Saeed, Durham University; Xiang Fang, Curtin University; Xiaoyu Yu, Shanghai University
• Output: “Does Remote Work Adoption Boost Firm Innovation? A Cross-Cultural Study,” The International Journal of Human Resource Management, 2025.
• Overview: Can working from home spark innovation, or does it hold companies back? As remote work became widespread during the COVID-19 pandemic, this question took on new urgency for organizations worldwide. This study analyzed 8,053 firms across 21 countries to examine whether adopting remote work led companies to introduce new or improved products or services.
  
  To understand why the results might differ across firms, the researchers considered the role of national culture in shaping how remote work functions. They focused on cultural dimensions such as power distance (how much a society accepts unequal power structures) and indulgence (how freely people pursue personal enjoyment and autonomy). By comparing these cultural traits, the study aimed to explain why remote work promotes innovation in some settings but not others.
• Findings: Firms that adopted remote work were 51 percent more likely to innovate than those that did not. However, this advantage depended on the cultural environment. In low-power-distance countries like Sweden and the Netherlands, where flatter workplace hierarchies are common, remote-working firms reported a 60 percent innovation rate, compared to 40 percent in high-power-distance countries such as India and China.
  
  Similarly, in indulgent cultures like Mexico and Australia, where personal freedom and work-life balance are valued, the innovation rate for remote-working firms was 62 percent, compared to 40 percent in more restrained cultures like Russia and Egypt. The study also found stronger effects on innovation in short-term-oriented countries, where firms tend to prioritize present-day outcomes over long-term planning.
  
  These results suggest that remote work is more likely to foster innovation when it aligns with national values that support autonomy, flexibility, and quick adaptation.

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How Ad Spend Sharpens Analyst’s Vision

• Researchers: Heeick Choi, Sungkyunkwan University; Seungwon Lee, The Pennsylvania State University at Harrisburg; Inho Suk, State University of New York at Buffalo; Hao Zhang, Rochester Institute of Technology
• Output: “Product Advertising and Financial Analyst Forecasts,” SSRN, 2025.
• Overview: Product advertising doesn’t just influence customers; it also shapes how financial analysts evaluate a company’s future. This study examines whether advertising helps analysts make better predictions about a company’s earnings and sales. While advertising is usually viewed to customers, this research looked at how it also gives analysts publicly available clues about future business performance.
  
  The authors analyzed more than 25,000 observations of U.S. firms between 2001 and 2015, linking company advertising spending to the accuracy and impact of analyst forecasts. Advertising intensity was calculated by dividing a firm’s advertising expenses for the year by its total sales from the previous year, allowing the researchers to compare spending levels across companies of different sizes. Forecast quality was assessed in two ways: how much the stock price changed after a forecast was released, and how closely the forecast matched the firm’s actual results.

• Findings: Firms that spent more on advertising received forecasts that were both more accurate and more influential in the stock market. An increase in advertising was linked to an 11-point rise in stock value within three days of an analyst forecast, which added about 1.94 million dollars in market value for the average company. Analysts made 18.9 percent fewer forecast errors when evaluating firms that spent more on advertising relative to their previous year’s sales, a measure known as advertising intensity.
  
  These effects were stronger when analysts specialized in the firm’s industry, when the company’s earnings varied widely from year to year, or when the company had recently launched a new product or brand. In these cases, advertising gave analysts new and specific information that improved their predictions.
  
  For companies in fast-changing industries, advertising can serve as a strategic message not just for customers but also for financial analysts who influence investor expectations.

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Managing for Meaning, Not Just Metrics

• Researchers: Sarah Pass and Yu-Ling Liu-Smith, Nottingham Business School; James Court-Smith and Serban Popescu, Stillae LTD; Nita Clarke and David MacLeod, OBE
• Output: “Engage for Success: UK Employee Engagement Survey 2025: Why Employee Engagement Is Central to Keeping Britain Working. London: Engage for Success,” Nottingham Trent University, 2025.
• Overview: As the U.K. faces rising economic inactivity and persistent labor shortages, understanding what keeps people engaged at work is more important than ever. The 2025 UK Employee Engagement Survey gathered responses from over 4,000 employees across sectors and regions to examine the drivers of sustainable engagement. Conducted by Engage for Success in partnership with Nottingham Business School, the survey tracks how workplace practices, leadership behavior, health, and inclusion influence employee motivation and resilience.
  
  Engagement was measured through an index based on satisfaction, loyalty, and advocacy, offering a national benchmark for workforce well-being. The study also analyzed how engagement varies across demographic groups, job structures, and organizational practices. The goal was not only to report on overall engagement levels but also to identify what enables people to remain in meaningful work.
• Findings: The average engagement rate rose to 65 percent in 2024, up from 62 percent in the previous two years, but the data revealed a pronounced divide across organizations. Employees in organizations where both senior leaders and line managers actively supported employee well-being and development reported engagement at 77 percent, compared to just 45 percent in organizations where neither demonstrated that support. This reflects an engagement gap of 32 percent. One in four respondents reported a long-term health condition, and their engagement was 8 points lower than that of their peers.
  
  Neurodivergent employees showed a 7-point drop in engagement, and for those who disclosed a health condition but received no workplace adjustments, engagement fell by 20 points. However, when adjustments for these employees were in place, their engagement levels closely matched those without health conditions. The survey also found that 1 in 10 employees experienced bullying or discrimination, and among those individuals, engagement dropped by 27 percent.
   
  These findings highlight the role of inclusive practices, proactive management, and flexible policies in supporting employee retention, performance, and well-being.

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From Likes to Market Spikes

• Researchers: Kevin Keasey, Costas Lambrinoudakis, Danilo V. Mascia, and Zhengfa Zhang, University of Leeds
• Output: “The Impact of Social Media Influencers on the Financial Market Performance of Firms,” Wiley, 2024.
• Overview: Social media influencers are everywhere, but do their posts have real financial consequences for companies? This study set out to measure whether activity by Instagram mega influencers—those with at least one million followers—impacts key financial market indicators. Using a dataset of more than 16 million posts between 2011 and 2022, researchers analyzed how influencer engagement and sentiment affect investor attention, stock volatility, trading volume, and returns.
  
  They focused particularly on the most impactful influencers and emotionally charged posts, asking whether these could trigger market movement. Instead of analyzing marketing strategy or brand impact, the study looked outward to assess whether financial markets respond to influencer content once it’s publicly available. This approach bridges social media engagement with investor behavior, asking whether digital visibility can move market signals such as stock activity or price swings.

• Findings: Mega influencers consistently increased investor attention and trading activity but had little effect on stock returns. When a post attracted more comments than usual, Wikipedia views rose by 3 percent, and Bloomberg readership increased by 3.5 percent. These attention spikes were followed by higher trading volume and more volatility. However, stock prices only moved when top influencers, defined as those who had consistently high engagement on prior posts, shared content with extreme sentiment, either strongly positive or strongly negative
  
  In those cases, stock returns shifted by about 0.54 percent the next day, but the effect disappeared within four trading days. Importantly, these posts did not predict any changes in company earnings or fundamentals. This suggests that influencer-driven market reactions are short-lived and rooted in hype, not business performance. Business leaders should monitor influencer activity not as a marker of long-term value but as a potential trigger for short-term volatility and investor noise.

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Validated, Then Evaluated

• Researchers: Gerhard Speckbacher, WU Vienna University of Economics and Business; Martin Wiernsperger, Cornell University
• Output: “Peer Evaluations in Diverse Teams: How External Validation of Team Performance Influences Ingroup Favoritism,” Accounting, Organizations and Society, 2025.
• Overview: What makes peer evaluations in diverse teams fair or biased? This study investigates a subtle but consequential form of bias known as ingroup favoritism, where individuals tend to rate teammates who share their gender, university affiliation, or other visible traits more favorably than those who don’t. Drawing on attribution theory and intergroup bias research, the authors explore how the timing of peer evaluations—specifically, whether they occur before or after a team’s performance has been externally validated—can influence this bias.
  
  External validation refers to feedback from sources such as supervisors, clients, or customer outcomes that confirm a team’s success or failure. To test whether the presence of such validation alters patterns of favoritism within diverse teams, the researchers conducted two experiments using team settings ranging from four-person creative advertising challenges to two-person emoji decoding tasks.
• Findings: The results reveal a powerful yet practical insight: peer evaluations conducted after external validation of team success significantly reduce ingroup favoritism. In the first experiment, participants in successful teams gave same-gender teammates peer evaluation scores that were 21 percent higher than those given to outgroup peers, but only when no external success signal was provided. Once the team’s success was validated, this bias nearly disappeared.
  
  In a second study using university affiliation instead of gender to define group identity, the pattern held: ingroup peers were rated significantly higher only in the absence of validation. However, validation of failure produced mixed effects, sometimes increasing bias, but never reducing it.
  
  These findings suggest that organizations can reduce bias in peer evaluations by aligning their timing with moments of external success recognition, ensuring that evaluations reflect genuine contributions rather than social similarity.

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If you have new research from your school share with the business education community, please submit a summary and relevant links to AACSB Insights via our online submission form at aacsb.edu/insights/articles/submissions.