Finance Papers

Document Type

Journal Article

Date of this Version

2006

Publication Source

Review of Finance

Volume

10

Issue

1

Start Page

1

Last Page

37

DOI

10.1007/s10679-006-6977-3

Abstract

We study how the adoption of the euro as the common currency in Europe has affected firms' investment rates. Using corporate data from the eleven countries that adopted the euro in January 1999, as well as from a control sample of five other European countries, our paper shows that: (i) the euro has increased investments for firms from countries that previously had weak currencies, (ii) the euro has had a positive impact on financially constrained firms' investments, and (iii) the euro has decreased investments for financially unconstrained firms from countries that previously had strong currencies.

Copyright/Permission Statement

This is a pre-copyedited, author-produced PDF of an article accepted for publication in Review of Finance following peer review. The version of record is available online at: http://dx.doi.org/10.1007/s10679-006-6977-3.

Comments

At the time of publication, author Yrjo Koskinen was affiliated with Boston University School of Management and CEPR. Currently, he is a faculty member at the Wharton School at the University of Pennsylvania.

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Date Posted: 27 November 2017

This document has been peer reviewed.