European Integration and Corporate Financing
77 Pages Posted: 6 Feb 2009 Last revised: 20 Jul 2013
Date Written: July 17, 2013
This paper explores the importance of supply of capital for corporate financing. To identify this relation, we examine the impact of two exogenous events, entry to the EU and the adoption of Euro, which caused shifts in equity and credit markets during European integration. Following membership to EU, which eased access to equity capital, firms increase equity financing. Firms increase debt financing after the adoption of Euro, which improved access to international debt capital. We control for globalisation, ongoing developments in equity and credit channels, firm characteristics, and the moderating effects of the country of origin.
Keywords: European Integration, Capital Structure, Debt Maturity, FDI, European Firms
JEL Classification: G15, G32, F36
Suggested Citation: Suggested Citation