Published in Journal of Economics and Development: How Investor Negativity Shapes Firm Distress

NIC AU congratulates Dr. Huỳnh Tấn Đạt (NIC AU), together with Xuân Thị Thanh Phạm, Như Thị Kim Nguyễn and Thu Bích Lưu, on the publication of “Investor Negativity Derived from News Shapes Firm Distress Dynamics Under Bounded Rationality” in the Journal of Economics and Development.

A Behavioural-Finance Breakthrough

Mining over 80,000 Vietnamese news articles with large language models to measure firm-level sentiment, the authors uncover a striking inverted U-shaped relationship between investor negativity and firm distress — risk climbs with bad news, then paradoxically falls beyond a tipping point.

Grounded in prospect theory and regret theory, and validated across 80 distressed listed Vietnamese firms (2010–2022), the model sharpens early-warning prediction well beyond what traditional financial ratios alone can offer.

Read more on the Resources page or the full paper on Emerald Insight.