AbstractThis paper explores strategies for generating and evaluating novel research ideas. Researchers can identify promising ideas by systematically exposing themselves to new, practitioner‐relevant information and by contrasting emerging facts with existing theories. Additionally, by identifying the necessary conditions that are required for an idea to become a viable research project, researchers can quickly discard low‐prospect ideas, freeing up mental space and time to evaluate new research opportunities.

AbstractThis research investigates how block orders affect trade premium and order execution quality across trader types in Taiwan's order‐driven call market. Foreign investors place buy‐side block orders at a smaller premium compared to individuals, while submitting sell‐side block orders at a smaller discount than individuals. Block orders tend to have longer order duration but lower fill rates. Domestic institutions themselves complete their orders faster than individuals do. Foreign investors have better market‐timing capabilities either for buying or selling block orders and thus obtain shorter order duration but higher fill rate.

AbstractWe investigate how the personal political preferences of top managers shape the investor base of firms. Based on the risk‐aversion attitude of firm decisions that rely on conservative political ideologies, we find that Republican managers tend to maintain a lower leverage level; invest less in tangible assets and R&D to pursue near‐term profitability; and maintain a high quality of information disclosure to increase stock liquidity. We demonstrate that firms led by Republican managers can attract more transient institutions. This relationship becomes stronger during financially stressful periods and is robust after considering the moderating role of managerial discretion and potential endogeneity.

AbstractThis study finds that mandatory rotation of engagement partners results in more positive earnings response coefficient (ERC) in the years immediately following rotation than in the years that are not. Further analysis reveals that the positive association is driven by firms that announce bad earnings news and for bonds with longer maturity terms. Furthermore, such positive association is stronger when the incoming engagement partner has more industry expertise than the leaving partner, when the audit firm is a non–Big 6 auditor, and when the client firm is small. Finally, the relationship does not exist for voluntary partner rotation.

AbstractWe study the effects of carbon transition risk on equity prices in the United States and Europe using disclosed carbon intensity data and find a negative effect on the cross section of returns and a negative carbon premium for the period 2009–2019. Examining fund flows, we find that institutional investors had an aversion to carbon‐intensive stocks, which could help explain the outperformance of green stocks. We find that after the Paris Agreement this negative carbon premium disappears, and expect a positive premium in the future. We apply an asset‐pricing approach to quantify the carbon risk exposure of any given asset.

AbstractWe use decimalization of the tick size, which exogenously increases stock liquidity and thereby heightens blockholder governance, to identify its effect on corporate social responsibility (CSR). We find that enhanced blockholder governance after decimalization leads to lower excessive CSR performance and higher firm value. Compared to active blockholders, passive blockholders, relying on the threat of selling shares and exiting, drive our results. The inverse relationship between blockholder governance and CSR is more pronounced for firms with poor corporate governance prior to decimalization. Our evidence suggests that blockholder exit threat can serve as a governance device to alleviate agency‐driven CSR.