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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

Research Interest

  • Corporate Finance, Banking, Optimal Contracting, Structural Estimation


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 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%.

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

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.

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.

  • Human Capital Portability and Bankers’ Career Path, with Wenyu Wang and Janet Gao

We quantify the degree of human capital portability in the M&A advisory industry. What find that a significance portion of human capital is match-specific and unportable. Over time, bankers trade off portability for efficiency when making career decisions. Human capital portability has important long-term implications on both banker' career path and the industry composition (the raise of boutique banks).

  • The Coexistence of Maturity and Safety Transformation in Banks, with Kairong Xiao

We show that there is an important synergy between the two main functions of banks: safety and maturity transformation. We use a structural banking model to quantify the synergy and show that it has important consequence on banks' choice of loan maturity and credit risk. Regulations that ignore such synergy and access credit and interest risk separately leads to inefficient outcomes.

Work in Progress

  • Do Shareholders Benefit from More Governance? with Wenyu Wang, and Felix Feng
  • Disentangling Takeover Motives, with Wenyu Wang, and Di Li.


  • Boston University (2019), Coumbia Junior Workshop (2019), Univesity of Wisconsin (2019), University of Lausanne (2019), Federal Reserve Bank of New York (2019), Chinese University of Hong Kong (2019), SFS Calvacade (2019), Northeastern University Finance Conference (2019), FMA Wine Country Finance Conference (2019), RMFI Conference (2019), University of Michigan (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).