Welcome to Yufeng's HomePage
Yufeng Wu (吴榆枫)
Assistant Professor of Finance
Gies College of Business, University of Illinois at Urbana-Champaign
315 Wohlers Hall, Champaign, IL, 61820
Email: yufengwu [AT] illinois [DOT] edu
- Capital Structure, Payout Policy, Banking, Optimal Contracting
- Collateral, Taxes, and Leverage, with Shaojin Li and Toni Whited, Review of Financial Studies, 2016.
We quantify the importance of collateral versus taxes for firms’ capital structures. Using a dynamic contracting model, we estimate the value of preserving financial flexibility at 7.2% of firm assets, which is comparable to the tax benefit.
- What's Behind the Smooth Dividends? Evidence from Structural Estimation, The Review of Financial Studies, 2018.
What's the driving forces behind the smooth dividends? I find that dividend smoothing is driven not only by shareholders' desire to communicate information but also by managers' career concerns. Managers cut investments and adjust external financing policies to accommodate this career concern-based dividend smoothing. These effects destroy firm value by 2.09%.
- Managerial Control Benefits and Takeover Market Efficiency, with Wenyu Wang, Journal of Financial Economics, revise and resubmit.
How and to what extent do managerial control benefits shape the efficiency of the takeover market? We revisit this question by estimating both the dark and bright sides of managerial control benefits in an industry equilibrium model. Our estimation suggests that the relative magnitudes of the two effects vary widely across subsamples. Shareholders can gain from having high control benefit managers when their firms underperform.
- Managerial Career Concerns, Information Withholding, and Corporate Dividend Policies, with Ke Na, Journal of Accounting and Economics, under review.
We exploit the staggered adoption of the Inevitable Disclosure Doctrine (IDD) by U.S. states as an exogenous increase in managers' career concerns. We .find that managers' career concerns lead them to withhold significant information. Firms smooth dividends more and the information content of dividend decreases after their states adopted the IDD.
- Market Power and Monetary Policy Transmission: Evidence from a Structural Estimation, with Yifei Wang, Toni M. Whited, and Kairong Xiao
We quantify the impact of bank market power on the pass-through of monetary policy to borrowers. Compared with the conventional regulation-based channels, bank market power explains a significant fraction of interest pass-throughs. In addition, the market power channel interacts with the bank capital channel, and this interaction can reverse the effect of monetary policy when the Federal Funds rate is low.
- Do Shareholders Benefit from More Governance? with Wenyu Wang and Felix Feng
We build a dynamic optimal contracting model with adverse selection and moral hazard. In the model, managers have different levels of control benefits privately known to themselves. Higher governance, on one hand, leads to more efficient payment structure ex-post; on the other hand, it also entails higher adverse selection cost ex-ante.
Work in Progress
- Why Banks Do Not Hedge Their Interest Rate Exposure?
- Information Timeliness and the Implicit Cost of Voluntary Disclosure.
- University of Lausanne(scheduled, 2019), Federal Reserve Bank of New York(scheduled, 2019), Chinese University of Hong Kong(scheduled, 2019), University of Michigan(scheduled, 2019), University of Virginia(2018), University of Oregon(2018), AFA(2017), Cheung Kong Graduate School of Business (2016), National Super Computing Applications (2016), CICF(2016), EFA(2016), University of Rochester (2015), Florida State University (2015), Washington University at St.Louis (2015), University of Utah (2015), University of Washington (2015), University of South Carolina (2015), University of Illinois at Chicago (2015), Johns Hopkins University (2015), Baruch College (2015), Indiana University (2015), University of Illinois at Urbana-Champaign (2015), FIRS (2014).