The Real Effects of the Euro: Evidence from Corporate Investments

53 Pages Posted: 2 Jul 2004

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: May 2005

Abstract

We study how the adoption of the euro as the common currency in Europe has affected firms' investment rates. Using corporate data from the eleven countries that adopted the euro in January 1999, as well as from a control sample of five other European countries, our paper shows that: (i) the euro has increased investments for firms from countries that previously had weak currencies, (ii) the euro has had a positive impact on financially constrained firms' investments, and (iii) the euro has decreased investments for financially unconstrained firms from countries that previously had strong currencies.

Keywords: EMU, the euro, investments, currency union, financial constraints

JEL Classification: F33, F36, G32

Suggested Citation

Bris, Arturo and Koskinen, Yrjo J and Nilsson, Mattias, The Real Effects of the Euro: Evidence from Corporate Investments (May 2005). EFA 2004 Maastricht Meetings Paper No. 4652. Available at SSRN: https://ssrn.com/abstract=559941 or http://dx.doi.org/10.2139/ssrn.559941

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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