We investigate the effect of top managers' myopia on firms' market valuation. We devise a measure of expected CEO tenure as a proxy of the length of CEO decision horizon. After accounting for the endogenous nature of CEO horizon, our empirical tests show that it is significantly associated with...

A shift in the focus of finance research is needed so that it can benefit society. Practitioner-oriented journals should take the lead by proactively asking academics and practitioners to identify topics that address nascent challenges facing the financial system and invite them and...

The Tax Cuts and Jobs Act (TCJA) enacted in December 2017 will limit the deductibility of business interest expense to 30% of adjusted taxable income (ATI) beginning in 2022. This article uses earnings before interest and taxes (EBIT) as a proxy for ATI to examines how this bill will have an...

Addressing climate change could cost the U.S. in the trillions of dollars in the future. How the nation will finance such a costly venture is yet to be determined. The upside of these expenditures is an increase in economic activity and GDP. The downside is that the economic activity might not...

This paper assesses the monitoring power of security analysts from the manager-shareholder conflict perspective. Using a sample of UK firms tracked by security analysts, our evidence supports the view that security analysis acts as a monitoring mechanism in reducing agency costs. We also find...

The well-documented under performance of lottery stocks masks a within-month cyclical pattern. Demand for lottery stocks increases at the turn of the month especially in areas whose demographic profile resembles that of the typical lottery-ticket buyers (i.e., gamblers) driving their prices...

We examine senators’ electronically filed stock transactions between 2012 and 2019 to assess the extent of politician’s insider trading. Our results suggest that senators use inside political information when investing and earn significant market-adjusted returns. To extend traditional...

Combining studies on CEO personality traits and real options theory, we propose that the firm’s strategic flexibility can be improved by CEO openness to experience but worsened by CEO conscientiousness and neuroticism. We construct the degree of strategic flexibility by exploring the firm’s...

In this study, we apply a new concept, corporate proximity to political power, to accounting research and examine its consequences on corporate financial reporting. Prior literature shows that higher proximity to political power leads to higher policy risk, i.e., uncertainty regarding the impact...

We assess whether observable corporate political strategies can serve as channels of value-relevant political information flow into stock prices and form the basis for profitable return predictability strategies. We document that returns of politically connected firms' stocks lead those of their...