Growing up in a small village in the French Alps, Sébastien
Michenaud had a childhood light years away from the business world. The son of
an elevator repairman and a stay-at-home mother, Michenaud often yearned for
something beyond his rural existence.
“I come from a family background that is totally removed
from finance and business,” says Michenaud. “Neither of my parents even
graduated from high school.”
But Michenaud transcended this humble up bringing to
graduate from one of the top business programs in the world, HEC Paris.
He then landed positions as a business analyst and
management consultant in the lucrative mergers and acquisitions market.
Michenaud was well invested in his finance career when, suddenly, he had a
feeling something was missing.
“I realized I had fulfilled my need to be monetarily
successful, but I was looking for a sense of purpose. I figured out it had to
be more than just making money,” says Michenaud.
The finance careerist decided he wanted to teach and went
on to get his PhD from HEC Paris and Swiss Finance Institute. It was the
academic research requirement for his doctoral studies that led him back to
groundbreaking work in the world of finance.
Professor Gains Awards for Teaching and Research
Since then Michenaud has done award-winning research and has
written about diverse topics such as the how sell-side equity analysts affect
corporate decision-making and the design of incentive contracts for CEOs. His
most recent work looks at the effects of short selling on the financial
In “The Real
Effects of Short Selling Constraints,” published this year in The Review of
Financial Studies, Michenaud and his colleagues examined how lifting a ban on
short selling affected firms’ stock prices and investment.
Michenaud’s research looked at causality within the
financial markets using a rarity—a randomized experiment designed for the
entire US stock market. In this case, there was a random group of companies that
were affected by the ban on short selling while the rest of the US listed firms
The researchers could study the effects on the stock prices
of companies that were under the short-selling ban and compare them to those of companies that were exempt from the ban.
“It’s very difficult to discover the causal effects of
financial markets,” says Michenaud. “We were able to show that the shock to the
stock prices in our sample of stocks were not caused by anything else but the
removal of the short-selling constraints.”
Academic Research Enriches Student Success
Such research may seem purely academic, but Michenaud says students
can benefit greatly from it.
“Having teachers who understand current research and are at
the forefront of it is invaluable to students in that it gives them access to
this new knowledge before anyone else synthesizes it in future textbooks,” says
For example, Michenaud says that a former MBA student used
recent research in asset pricing to start his hedge fund. Another student used
research on sell-side equity research analyst bias to better understand
forecasting and outperform his competition.
Michenaud hopes to inspire DePaul finance students in a
similar way as he delves deeper into his two passions: teaching and research.
“As academics, we are building new knowledge and evaluating
the advancement of knowledge in the profession that will be used in the
textbooks of the future,” says Michenaud.
about DePaul's graduate programs in finance.