Faculty Spotlight: Richard Borghesi
By Jamie Boyle
ST. PETERSBURG (December 4, 2020) -- Finance Professor Richard Borghesi’s research interests include corporate finance, sports, corruption, market efficiency, and prediction markets. Most recently Borghesi is working with two colleagues (Kiyoung Chang and Jong Chool Park) in pursuing accounting/finance interdisciplinary research. Their hope is that by bringing together concepts and data used in both disciplines they can generate a larger impact than they would have via a more narrow focus, they have two additional projects underway.
In their first study they examine whether corporate managers negotiate fairly with labor union representatives by exploring the relationship between firm financial accounting practices and the degree of employee unionization. They show that managers of highly unionized firms are more likely to muddy the firm’s true financial position to gain an unfair advantage when negotiating with labor union leadership. Throughout, they plan to focus on the ethical implications of such behavior. This paper is nearing the end of the data analysis phase and is slated for submission to Journal of Business Ethics.
In their second cross-disciplinary project they study the relationship between the generosity of state unemployment insurance benefits and corporate internal accounting control effectiveness. Internal controls are the mechanisms by which a corporation ensures the integrity of its financial accounting information. Firms exhibiting internal control weaknesses are more likely to experience a litany of serious problems including, for example, accounting fraud. Their theoretical framework and findings suggest that an increase in state unemployment benefits causes employees to become more insulated to the negative effects of deficits in internal controls. In other words, when unemployment insurance benefits increase employees care less about the possibility of and costs resulting from job loss, and so they are less likely commit themselves fully towards satisfying their workplace responsibilities. This paper will be submitted to an FT Top 50 accounting journal.
Additionally, along with coauthors Andy Naranjo and Mike Ryngaert (each from the University of Florida) Borghesi is working on a study that utilizes betting odds to measure the level of surprise associated with golf tournament outcomes (e.g., who wins and who loses and by how much relative to expectations) in each of the four majors (U.S. Open, The Open Championship, PGA Championship, and Masters) from 2008 to 2020. They expect to find that the more positive the surprise, the greater the sponsor’s stock returns. One goal is to determine whether the expenses associated with golf equipment sponsorships are justified. This project is currently late in the data gathering phase.