Did the Euro Crisis Affect Non-Financial Firm Stock Prices Through a Financial or Trade Channel?

41 Pages Posted: 8 Oct 2011

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Hui Tong

International Monetary Fund (IMF)

Igor Zuccardi

affiliation not provided to SSRN

Date Written: September 2011

Abstract

This paper analyzes through what channels the euro crisis has affected firm valuations globally. It examines stock price responses over the past year for 3045 non-financial firms in 16 countries to three key crisis events. Using pre-crisis benchmarks, it separates effects arising from changes in external financing and trade conditions and examines how bank and trade linkages propagated effects across borders. It finds that policy measures announced impacted financially-constrained firms more, particularly in creditor countries with greater bank exposure to peripheral euro countries. Trade linkages with peripheral countries also played a role, with euro exchange rate movements causing differential effects.

Keywords: Capital markets, Corporate sector, Euro Area, Europe, Financial crisis, Sovereign debt, Spillovers, Stock prices, Trade

Suggested Citation

Claessens, Stijn and Tong, Hui and Zuccardi, Igor, Did the Euro Crisis Affect Non-Financial Firm Stock Prices Through a Financial or Trade Channel? (September 2011). IMF Working Papers, Vol. , pp. 1-40, 2011. Available at SSRN: https://ssrn.com/abstract=1940813

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Hui Tong

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Igor Zuccardi

affiliation not provided to SSRN

Register to save articles to
your library

Register

Paper statistics

Downloads
157
Abstract Views
764
rank
185,757
PlumX Metrics