Paul Borochin

Assistant Professor

Finance


Education/Professional Certification

Ph.D., Duke University

B.S., University of Pennsylvania

CFA Charterholder

Areas of Expertise

Derivatives Pricing

Institutional Ownership

Corporate Events and Policies

Biography

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.

Featured Research

Published and Forthcoming Papers

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.

Contact Information
Emailpborochin@business.uconn.edu
Phone+1 (860) 486-2774
Mailing Address2100 Hillside Rd, Unit 1041
Office LocationBUSN 452
CampusStorrs
Office HoursBy appointment
Linkhttps://sites.google.com/site/pborochin
Download CV