David Yermack
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View article: Ambiguity and the Tradeoff Theory of Capital Structure
Ambiguity and the Tradeoff Theory of Capital Structure Open
We examine the impact of ambiguity, or Knightian uncertainty, on the capital structure decision, using a static tradeoff theory model in which agents are both ambiguity and risk averse. The model confirms the well-known result that greater…
View article: Is a Higher Calling Enough? Incentive Compensation in the Church
Is a Higher Calling Enough? Incentive Compensation in the Church Open
We study the compensation and productivity of more than 2,000 Methodist ministers in a 43-year panel data set. The church appears to use pay-for-performance incentives for its clergy, as their compensation follows a sharing rule by which p…
View article: Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales
Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales Open
Initial coin offerings (ICOs) have emerged as a new mechanism for entrepreneurial finance, with parallels to initial public offerings, venture capital, and presale crowdfunding. In a sample of more than 1,500 ICOs that collectively raise $…
View article: How Do Private Digital Currencies Affect Government Policy?
How Do Private Digital Currencies Affect Government Policy? Open
This paper provides a systematic evaluation of the different types of digital currencies.We express skepticism regarding centralized digital currencies and therefore focus our economic analysis on private digital currencies.Specifically, w…
View article: Investment Returns and Distribution Policies of Non-Profit Endowment Funds
Investment Returns and Distribution Policies of Non-Profit Endowment Funds Open
We present the first estimates of investment returns and distribution rates for U.S. non-profit endowments, based on a comprehensive sample of 35,755 organizations for 2009-2018, a period that saw a sharp drop followed by a lengthy appreci…
View article: Digital currencies, decentralized ledgers and the future of central banking
Digital currencies, decentralized ledgers and the future of central banking Open
Central banking in an age of digital currencies is a fast-developing topic in monetary economics. Algorithmic digital currencies such as bitcoin appear to be viable competitors to central bank fiat currency, and their presence in the marke…
View article: Credit Default Swaps, Agency Problems, and Management Incentives
Credit Default Swaps, Agency Problems, and Management Incentives Open
We show in a theoretical model that credit default swaps induce managerial agency problems through two channels: reducing the opportunity for managers to transfer value to equityholders from creditors via strategic default, and reducing th…
View article: Credit Default Swaps, Agency Problems, and Management Incentives
Credit Default Swaps, Agency Problems, and Management Incentives Open
We show in a theoretical model that credit default swaps induce managerial agency problems through two channels: reducing the opportunity for managers to transfer value to equityholders from creditors via strategic default, and reducing th…
View article: Comments on Shan and Walter: ‘Towards a Set of Design Principles for Executive Compensation Contracts’
Comments on Shan and Walter: ‘Towards a Set of Design Principles for Executive Compensation Contracts’ Open
This paper is developed around the set of design principles for executive compensation contracts as outlined in the study of Shan and Walter (2014).We propose guidance for determining an appropriate CEO starting compensation level based on…
View article: Central banks of developing nations should issue digital currency
Central banks of developing nations should issue digital currency Open
Blockchain technology and smart contracts have made certainty in monetary policy a legitimate possibility, argue Max Raskin and David Yermack
View article: Ambiguity and the Tradeoff Theory of Capital Structure
Ambiguity and the Tradeoff Theory of Capital Structure Open
We examine the impact of ambiguity, or Knightian uncertainty, on the capital structure decision, using a static tradeoff theory model in which agents are both ambiguity and risk averse.The model confirms the well-known result that greater …
View article: Digital Currencies, Decentralized Ledgers, and the Future of Central Banking
Digital Currencies, Decentralized Ledgers, and the Future of Central Banking Open
Central banking in an age of digital currencies is a fast-developing topic in monetary economics.Algorithmic digital currencies such as bitcoin appear to be viable competitors to central bank fiat currency, and their presence in the market…