We show that firms with higher stock liquidity engage less in extreme (i.e., either overly aggressive or overly conservative) tax avoidance. The effect of stock liquidity on tax avoidance is economically meaningful, is robust across alternative measures of tax avoidance and stock liquidity, and...

We find that stock liquidity increases stock price crash risk. To identify the causal effect, we use the decimalization of stock trading as an exogenous shock to liquidity. This effect is increasing in a firm’s ownership by transient investors and non-blockholders. Liquid firms have a higher...

This paper introduces a new proxy for expected value-relevant earnings: the most optimistic (pessimistic) forecast of earnings that is higher (lower) than the median of all analysts' earnings forecasts over the 90 days prior to the earnings announcement when the median falls short of (exceeds)...