The euro and corporate financing before the crisis

Arturo Bris, Yrjö Koskinen () and Mattias Nilsson

Journal of Financial Economics, 2014, vol. 114, issue 3, 554-575

Abstract: We study the financing policies of European public corporations prior to the euro crisis. Using data from 11 euro countries and a control group of five other European countries over 1991–2006, we show that nonfinancial firms from euro countries with previously weak currencies considerably increased their debt financing after the introduction of the euro. The results are stronger for large firms, firms dependent on external financing, and for the latter part of the post-euro time period. Overall, the results support the hypothesis that the supply of capital increased following the introduction of the euro.

Keywords: Euro; Financial integration; External financing; Debt financing; Supply of capital; Financial dependence (search for similar items in EconPapers)
JEL-codes: F33 F36 G32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:114:y:2014:i:3:p:554-575

DOI: 10.1016/j.jfineco.2014.08.003

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