Work

Does the Introduction of the Euro Affect the Debt-Equity Choice?

Year: 2006

Type: preprint

Abstract: We study firms from 14 Western European countries to detect the influence of a vanishing risk premium due to exchange rate risk on equity and debt issues. According to our hypothesis, Eurozone firms in industries with relatively higher external finance dependence (EFD) issue more equity and debt after 1999 than those outside the Euro area. We find that Eurozone firms in high EFD industries are more likely to issue equity, and are more likely to be equity issuers than debt issuers after 1999. Further, there is evidence that firms in our sample follow a dynamic leverage target.

Source: SSRN Electronic Journal

Authors: Karin Jõeveer, Péter Tóth

Institutions: Tallinn University of Technology, Center for Economic Research and Graduate Education – Economics Institute, Charles University

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1524737769

Cites: 19

Cited by: 1

Related to: 10