The Real Effects of the Euro: Evidence from Corporate Investments
AbstractExisting evidence shows that the Economic and Monetary Union (EMU) has reduced the cost of capital for firms in the euro area. We study the impact of the adoption of the euro in January 1999 by 11 countries in Europe on the firms’ investment rates, and show that the investment results are consistent with reduction in cost of capital. Using corporate data from the 11 EMU countries, as well as from a control sample of 5 non-EMU, European countries, our paper shows that: (i) investments for EMU-firms have grown 2.5% more than for non-EMU firms, after 1999; and (ii) the benefits of the euro accrue especially to small, domestic firms from countries with previously weak currencies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4521.
Date of creation: Aug 2004
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Arturo Bris & Yrjö Koskinen & Mattias Nilsson, 2006. "The Real Effects of the Euro: Evidence from Corporate Investments," Review of Finance, European Finance Association, vol. 10(1), pages 1-37.
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-13 (All new papers)
- NEP-EEC-2005-02-13 (European Economics)
- NEP-FIN-2005-02-13 (Finance)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Tullio Jappelli & Marco Pagano, 2008.
"Financial Market Integration under EMU,"
European Economy - Economic Papers
312, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Jappelli, Tullio & Pagano, Marco, 2008. "Financial Market Integration Under EMU," CEPR Discussion Papers 7091, C.E.P.R. Discussion Papers.
- Tullio Jappelli & Marco Pagano, 2008. "Financial Market Integration Under EMU," CSEF Working Papers 197, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Jappelli, Tullio & Pagano, Marco, 2008. "Financial market integration under EMU," CFS Working Paper Series 2008/33, Center for Financial Studies (CFS).
- Bris, Arturo & Koskinen, Yrjö & Nilsson, Mattias, 2011.
"The euro and corporate financing,"
Research Discussion Papers
6/2011, Bank of Finland.
- Saumitra, Bhaduri & Sunanda, Rathi, 2012. "Bank firm nexus and its impact on firm performance: an Indian case study," MPRA Paper 38000, University Library of Munich, Germany.
- Sohnke M. Bartram & G. Andrew Karolyi, 2002.
"The Impact of the Introduction of the Euro on Foreign Exchange Rate Risk Exposures,"
0207005, EconWPA, revised 16 Sep 2002.
- Bartram, Sohnke M. & Karolyi, G. Andrew, 2006. "The impact of the introduction of the Euro on foreign exchange rate risk exposures," Journal of Empirical Finance, Elsevier, vol. 13(4-5), pages 519-549, October.
- Bartram, Sohnke M. & Karolyi, G. Andrew, 2004. "The Impact of the Introduction of the Euro on Foreign Exchange Rate Risk Exposures," Working Paper Series 2005-3, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- Wan, Jer-Yuh & Kao, Chung-Wei, 2008. "The euro and pound volatility dynamics: An investigation from conditional jump process," Research in International Business and Finance, Elsevier, vol. 22(2), pages 193-207, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.