European integration and corporate financing

Muradoglu, Y.G., Onay, C. & Phylaktis, K. (2014). European integration and corporate financing. International Review of Financial Analysis, 33, pp. 138-157. doi: 10.1016/j.irfa.2014.02.002

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Abstract

This paper explores the importance of supply of capital for corporate financing. To identify this relation, we examine the impact of two exogenous events, entry to the EU and the adoption of Euro, which caused shifts in equity and credit markets during European integration. Following membership to EU, which eased access to equity capital, firms increase equity financing. Firms increase debt financing after the adoption of Euro, which improved access to international debt capital. We control for globalization, ongoing developments in equity and credit channels, firm characteristics, and the moderating effects of the country of origin.

Item Type: Article
Uncontrolled Keywords: European integration; Capital structure; Debt maturity; FDI; European firms
Subjects: H Social Sciences > HG Finance
Divisions: Cass Business School > Faculty of Finance
URI: http://openaccess.city.ac.uk/id/eprint/17205

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