Empirical estimates of the impact of the euro on the corporate bond market in the euro area
Empirical estimates of an error-correction model, nested in a partial adjustment framework, show that the euro had a temporary impact, via mergers and acquisitions activity, on corporate bond issuance in the euro area. In addition, a permanent effect is found for corporate bonds issued by non-monetary financial corporations. For the first five years of the single currency, these effects are estimated to have been up to 2½ and around 5½ percentage points, respectively, of the annual bond market growth. Other significant determinants of corporate bond issuance are economic activity, the cost of bond issuance relative to other sources of external finance and mergers and acquisitions.
Volume (Year): 11 (2004)
Issue (Month): 11 ()
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- Philipp Hartmann & Angela Maddaloni & Simone Manganelli, 2003.
"The Euro-area Financial System: Structure, Integration, and Policy Initiatives,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 19(1), pages 180-213.
- Manganelli, Simone & Hartmann, Philipp & Maddaloni, Angela, 2003. "The euro area financial system: structure, integration and policy initiatives," Working Paper Series 0230, European Central Bank.
- Gabriele Galati & Kostas Tsatsaronis, 2001. "The impact of the euro on Europe's financial markets," BIS Working Papers 100, Bank for International Settlements.
- Joaquim Vieira Ferreira Levy & Alessandro Calza & Dieter Gerdesmeier, 2001. "Euro Area Money Demand; Measuring the Opportunity Costs Appropriately," IMF Working Papers 01/179, International Monetary Fund.
- E. P. Davis, 2001. "Multiple Avenues of Intermediation, Corporate Finance and Financial Stability," IMF Working Papers 01/115, International Monetary Fund.
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