Ideally, a balance between theoretical research (research that develop theory) and empirical research (research that confirm theory with data) is preferred. However, in recent times, it appears that empirical research has been growing faster than theoretical research. It seems this trend is likely to continue into the future. If this trend continues, we may have less theory to explain some empirical findings.
True, but we don't need to generate that many theory for empirical work, particularly in finance and accounting. Many of the theory can be borrowed from the economics theory. Agency theory and contract theory themselves generates hundreds of empirical works.
Luo, I appreciate your response, but some research issues or problem are unexplainable with existing theories. So, new theory may be desirable in such a situation. May be advancement in econometrics is encouraging more empirical research, but less attention on theoretical research (research that develop theory). Clarifications are welcome.
I perform research in a different field from you, but I think the answer is YES.
A theory is a model that fits the observed facts and can be used to predict future outcomes. So if you have empirical evidence and an appropriate literature review context, I think it is reasonable to develop theory.
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