This paper examines whether larger tick sizes improve or hinder price efficiency using data from implementing and terminating the Tick Size Pilot Program (TSP). We show that the TSP led to increases in various liquidity measures, and its termination restored them to their pre-TSP levels. We also...

We employ the stochastic process underlying the Yule-Simon distribution as a descriptive model of conservatism and the representativeness heuristic in the peer-review process and test its prescriptive power. The observed distribution of the proportion of authors by the number of papers is...

This paper explores the role of pre-opening price signals in price discovery and liquidity. NYSE Rule 48 suspends the responsibility of designated market makers for disseminating pre-opening price indications in the event of extreme market-wide volatility. Rule 48 speeds up the opening of stocks...

This paper shows that COVID-19 is associated with a decrease in liquidity and increased pricing efficiency and trading activities before the NYSE closed its trading floor. The closure of the trading floor led to a reduction of liquidity, pricing efficiency, and trading activities on the NYSE....

The implementation of the new revenue recognition standard (ASC 606) has significantly changed the impact of earnings announcements on various measures of market quality and trading activities. In contrast to prior research findings, we show that earning announcements are accompanied by a...

Prior studies have provided a number of possible explanations for delayed market reactions to earnings announcements. However, there has been relatively little effort to predict the magnitude of the post-earnings announcement drift (PEAD). We show that the squared correlation coefficient (p2 )...

This paper shows that hedge fund activism is associated with a decrease in mergers and acquisitions (M&A) and offer premiums and an increase in stock and operating performance. Activist hedge funds improve target firms' M&A performance by reducing poor M&A, diversifying M&A, and the M&A of firms...

We show that firms that employ the majority voting method for director election exhibit higher institutional ownership than firms that employ the plurality voting method, especially after the 2010 amendment to NYSE Rule 452. Firms that adopt majority voting in a bylaw or charter exhibit...

This paper analyzes the role of passive blockholders in corporate governance using data on Schedule 13G filings. We show that firm value increases with the number and aggregate ownership of passive blockholders after controlling for other possible determinants of firm value. More importantly, we...

Using a recent pilot program as an exogenous shock to hidden liquidity, we show that hidden liquidity has significant effects on various measures of market quality and order submission strategies after controlling for market volatility and other stock attributes. Spreads, depths, trading volume,...