11 Pages Posted: 9 Feb 2005
One of the projected benefits of the euro was to be a unified capital market. The cost of capital would be lower and this, coupled with the larger market, would motivate large EU entities to satisfy their financing needs within the euro area. Our results support the expectation that the financial markets of the euro area countries would become more unified with a lowered cost of capital, especially for the less financially credible countries. It appears, however, that the benefit of a lower cost of capital has also accrued to the three EU countries that did not adopt the euro.
Suggested Citation: Suggested Citation
Askari, Hossein and Chatterjee, Joydeep, The Euro and Financial Market Integration. Journal of Common Market Studies, Vol. 43, No. 1, pp. 1-11, March 2005. Available at SSRN: https://ssrn.com/abstract=664126
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