afm

This is what Dennis Richey has to say about head shimming, which works precisely.
Hope it helps

AFM

" Engine Shim Tuning
A decrease in head shims or an increase in compression ratio will increase torque because as the compression ratio goes higher the actual ignition timing occurs sooner. This is the same effect that happens with a colder plug except in the instance of a colder plug the ignition is slowed until a greater point of compression build occurs. however there is a point of diminishing returns where detonation occurs or engine temps can soar this is where a colder plug can also help.
Consequently the same effect occurs when you increase the head clearance. top end is enhanced as the ignition timing is retarded and occurs later. generally a hotter plug is needed to advance the ignition cycle so the timing does not occur to late in the cycle as at this point you end up over leaning the engine to get it to rev properly and the engine life will suffer dramatically.

On a 12 engine I would only advise going .004 thousandths over or under .018. so that is .014 or .021. I have run as low as .008 but this was with tremendously increased exhaust timing and to regain static compression ratio. To little and the piston can hit the head as you have to take into account rod and piston growth relative to their temperatures.

You can safely use 30% on the stock head clearance. Using an O’Donnell 99 plug you can go to 40%, if you don’t over lean it the engine life will not suffer dramatically.

I should also point that my comments with regards to plugs and head shimming are when both are used together. used alone a hotter plug will rev harder and a colder plug will make more torque.
One last comment. never assume that the head shim that is on the engine is the actual head clearance. in many cases you will find that the engine actually has .006 to.008 without any head shim. Novarossi's are .008 without one and the factory installs an additional .010 giving the engine .018 stock. this has not always been the case but 99% of the time it is. when in doubt measure the head button register and the piston to the top of the liner at top dead center and subtract. this is the only way to really know.
Generally on a 12 engine .004 thousandths will change the Compression ratio about 3/4 to 1 point. I said generally.

Someone asked about plug fatigue the other day, plug fatigue can occur under high sustained RPM's this is where the plug stays shiny and the wire just fractures for no reason. This is why I have always run McCoy MC9 or the new O’Donnell plugs (77 or 99 standard plugs) as they don’t do this. When this happens it is usually not a carb. tuning or head clearance problem. If you see the wire start to pull out of the hole this means that the engine is scavenging really hard and when this occurs the engine is making serious power.

Motorman "