Research Discussion Papers, Bank of Finland
No 6/2011:
The euro and corporate financing
Arturo Bris ()
, Yrjö Koskinen ()
and Mattias Nilsson ()
Abstract: In this paper we study how the introduction of the euro
has affected corporate financing in Europe. We use firm-level data from
eleven euro area countries as well as from a control group of five other
European countries spanning the years 1991–2006. We show that firms from
euro area countries that previously had weak currencies have increased both
their equity and their debt financing compared to the control group. We
also show that results are stronger for firms that hail from less
financially developed euro area countries, and that large firms from
industries that are dependent on external financing have increased their
debt financing more. These results support the hypothesis that improved
access to capital markets in the euro area has enabled increased external
financing, especially debt financing
Keywords: euro; external financing; supply of capital; financial development; financial dependence; financial integration; (follow links to similar papers)
JEL-Codes: F33; F36; G32; (follow links to similar papers)
66 pages, March 15, 2011
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