In or out: the effect of euro membership on the exercise of real business options

Tom Aabo and Christos Pantzalis

The European Journal of Finance, 2011, vol. 17, issue 4, 259-284

Abstract: This empirical study of manufacturing firms (NAICS 33) in the EU15 countries goes beyond the trade statistics that have indicated only a small to negligible effect from the introduction of the Euro and shows that the introduction of the Euro has made Euro firms (firms based in one of the 12 Euro countries) more inclined than non-Euro firms (firms based in one of the three non-Euro countries: UK, Sweden, and Denmark) to undertake various forms of real actions (exercise real business options) such as to establish alliances/partnerships, to enter new markets/market segments, to switch suppliers, and to generally expand in the Euro-area. The results are important in understanding the potential long-term effects of Euro membership.

Keywords: Euro membership; real business options; long-term effects: manufacturing firms (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1080/13518471003640142

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