The Euro and Corporate Financing before the Crisis

45 Pages Posted: 10 Feb 2011 Last revised: 14 Mar 2014

See all articles by Arturo Bris

Arturo Bris

IMD International; European Corporate Governance Institute (ECGI); Yale University - International Center for Finance

Yrjo Koskinen

Haskayne School of Business, University of Calgary

Mattias Nilsson

U.S. Securities and Exchange Commission

Multiple version iconThere are 4 versions of this paper

Date Written: March 11, 2014

Abstract

We study the financing policies of European public corporations prior to the euro crisis. Using data from eleven euro countries and a control group of five other European countries over 1991-2006, we show that non-financial 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

JEL Classification: F33, F36, G32

Suggested Citation

Bris, Arturo and Koskinen, Yrjo J and Nilsson, Mattias, The Euro and Corporate Financing before the Crisis (March 11, 2014). Boston U. School of Management Research Paper No. 2011-1. Available at SSRN: https://ssrn.com/abstract=1757782 or http://dx.doi.org/10.2139/ssrn.1757782

Arturo Bris

IMD International ( email )

Ch. de Bellerive 23
P.O. Box 915
CH-1001 Lausanne
Switzerland

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Yale University - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States

Yrjo J Koskinen (Contact Author)

Haskayne School of Business, University of Calgary ( email )

SH 154, 2500 University Drive NW
Calgary, Alberta T2N 1N4
Canada
+1-403-220-5540 (Phone)

HOME PAGE: http://haskayne.ucalgary.ca/haskayne_info/profiles/yrjo-koskinen

Mattias Nilsson

U.S. Securities and Exchange Commission ( email )

United States Securities and Exchange Commission
100 F Street NE
Washington, DC 20549
United States

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