Ph.D., Duke University
B.S., University of Pennsylvania
Areas of Expertise
Corporate Events and Policies
I am an Assistant Professor of Finance at the University of Connecticut. I got my Ph.D. in Finance from the Fuqua School at Duke University and my B.S. in Finance and Statistics from the Wharton School at the University of Pennsylvania.
My research interests are institutional ownership and applications of asset pricing theory to extract information about corporate events and policies, with sub-specializations in corporate governance, information asymmetry, and M&A.
I teach a graduate seminar in asset pricing theory and undergraduate courses in corporate finance.
Published and Forthcoming Papers
- Borochin, Paul, Jim Cicon, Jared DeLisle and McKay Price (2017). The Effects of Conference Call Content on Market Perceptions of Value Uncertainty and Firm Risk. Journal of Financial Markets forthcoming.
- Borochin, Paul, and Weihua Cu (2017). Alternative Corporate Governance: Domestic Media Coverage of Mergers and Acquisitions in China. Lead Article, Journal of Banking and Finance 87.
- Borochin, Paul, and Jie Yang (2017). The Effects of Institutional Investor Objectives on Firm Valuation and Governance. Journal of Financial Economics 126.
- Borochin, Paul, John Glascock, Ran Lu-Andrews and Jie Yang (2017). Using Option Market Liquidity to Predict REIT Leverage Changes. Journal of Real Estate Finance and Economics 55.
- Borochin, Paul, and Jie Yang (2016). Options, Equity Risks, and the Value of Capital Structure Adjustments. Journal of Corporate Finance 42.
- Borochin, Paul, and Joseph Golec (2016). Using Options to Measure the Full Value-Effect of an Event: Application to Obamacare. Journal of Financial Economics 120.
- Bird, Robert, Paul Borochin and John Knopf (2015). The Role of the Chief Legal Officer in Corporate Governance. Lead Article, Journal of Corporate Finance 34.
- Borochin, Paul (2014). When Does a Merger Create Value? Using Option Prices to Elicit Market Beliefs. Financial Management 43.
Recent Working Papers
- Borochin, Paul, and John Knopf, Do Managers Seek Control and Entrenchment? Semifinalist for the Best Paper Award in Corporate Finance, Financial Management Association 2016. Revise and resubmit at Journal of Corporate Finance.
Abstract: At the IPO date, thrifts have a uniquely diffuse ownership structure and regulatory environment. This allows us to perform a natural experiment to test whether managers seek to entrench themselves. We find strong evidence that managers seek the level of ownership commonly associated with entrenchment (20% to 30%). Also, managers exploit the regulatory environment, by increasing ownership during the five years of takeover protection. This suggests that takeover fears are a strong driver of insider ownership. Finally, we find that managers issue less equity, make shares less liquid and maintain higher debt ratios to support their pursuit of entrenchment.
- Borochin, Paul, Chinmoy Ghosh, and Di Huang, Target Information Asymmetry and Takeover Strategy: Insights from a New Perspective. Revise and resubmit at European Financial Management.
Abstract: We examine the relation between information asymmetry and firm value using M&A as the identification strategy. Due to the due diligence and intense scrutiny of the target firm around M&A announcements, acquisitions are significant shocks to a target’s information asymmetry. We find that M&A announcement-period wealth gains are significantly related to target’s information asymmetry, and that opaque firms are more likely to be targets, and less likely to experience deal withdrawals. Furthermore, we find that the party with high information asymmetry is in a weaker position when negotiating the deal. Finally, we document that target information asymmetry influences method of payment, and the likelihood of diversifying deals.
- Borochin, Paul, and Yanhui Zhao, Belief Heterogeneity in the Option Market and Return Predictability.
Abstract: High standard deviations of the volatility premium, implied volatility innovations, and of the volatility term structure spread in equity options predict low underlying returns. This return predictability is not explained by the levels of these three variables, volatility of volatility, or other known firm characteristics, or by risk factor models. We find support for interpreting the standard deviations of these option-based measures as forward-looking proxies of heterogeneous beliefs. The negative relationship between our three measures and future underlying returns is consistent with the Miller (1977) result that divergence of investor opinions leads to lower expected returns.
Other working papers on SSRN.