Tak-Yuen Wong (黄德源)
Tak-Yuen Wong (黄德源)
Associate Professor of Finance
Department of Quantitative Finance
National Tsing Hua University
Email: etywong110@gmail.com
Curriculum Vitae: PDF
Research Interests:
Optimal Contracting
Financial Economics
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Publications:
Present Bias: Understanding Zero Leverage Policy and Unstable Capital Structure, with Yuan Li and Siqi Zhao, 2025, Journal of Mathematical Economics, 119, 103148.
Sophisticated present-biased entrepreneurs adopt a zero-leverage policy to commit against future over-borrowing, whereas naive entrepreneurs underestimate their future refinancing incentives, leading to unstable capital structures and exploitation by lenders.Securities Auctions with Pre-project Information Management, with Ho-Po Crystal Wong, 2023, International Journal of Industrial Organization, 88, 102929. [Online Appendix][Slides]
Performance-sensitive securities distort incentives to acquire information for addressing cost overruns and false cancellations. Because pre-project information is essential for success, a debt auction emerges as the optimal mechanism for selling the right to undertake the project.
Optimal Short-Termism, with Dirk Hackbarth and Alejandro Rivera, 2022, Management Science, 68(9), 6477-6505. [Slides][ECGI][VoxEU]
Debt-equity conflicts induce excessive short-termism, which constitutes a quantitatively important component of the agency cost of debt. Levered firms with impatient shareholders and deteriorating growth prospects endogenously shorten the horizon of their investment policies.Credit Default Swaps and Debt Overhang, with Jin Yu, 2022, Management Science, 68(3), 2069-2097.
Debt investors who have hedged with CDS and benefit from a firm bust are empty creditors. Such CDS protection generates negative real effects through the empty-creditor channel: it delays project investment, depresses asset growth, and increases the volatility of levered equity returns.Dynamic Agency and Endogenous Risk-Taking, 2019, Management Science, 65(9), 4032-4048.
High-powered incentives motivate both effort and risk-taking. In a dynamic contracting model, I show that inefficient downside risk-taking arises endogenously when the agent lacks sufficient skin in the game.
Working Papers:
Intermediary Capital and Financing Sustainable Investment, with Jin Yu. [Slides]
- Manulife Investment Bank X Aberdeen ESG-Sustainable Investment and Development Paper Award
Socially responsible funds promote sustainable investment by actively monitoring and providing green firms with cheaper financing. Market competition for social capital limits pledgeability, and carbon taxes and green subsidies may backfire.Intermediated Liquidity and Cash-Flow Risk, with Siqi Zhao. R&R at the Journal of Banking and Finance.
Mitigating Climate Risk in a Present-Biased World, with Yuan Li and Siqi Zhao.
Leverage Dynamics under Managerial Discretion, Jan 2021. [Slides]
Long-Term Capital Budgeting and Incentive Mechanism, with Buqu Gao, Oct 2017.
Commentaries:
Assessing the Optimality of Corporate Short-Termism, with Dirk Hackbarth and Alejandro Rivera, VoxEU CEPR's Policy Portal, Dec 2018.
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