Firm Financing in the Euro Area: How asset risk affects capital structure decisions within the monet

Using a sample of non-financial listed firms located in the Euro area, the determinants of capital structure decisions in the years 2000-2003 are investigated in this study. In line with the traditional theoretical approach and in contrast with traditional empirical literature, the study is based on a market-value measure of leverage, estimated with the Merton model. In a cross-section regressions some variables have similar effects on financing decisions across countries, while others may play a different role; risk, measured as the volatility of the market value of assets, is the best predictor of observed leverage ratios. The integration of Euro-area financial markets varies... alles anzeigen expand_more

Using a sample of non-financial listed firms located in the Euro area, the determinants of capital structure decisions in the years 2000-2003 are investigated in this study. In line with the traditional theoretical approach and in contrast with traditional empirical literature, the study is based on a market-value measure of leverage, estimated with the Merton model. In a cross-section regressions some variables have similar effects on financing decisions across countries, while others may play a different role; risk, measured as the volatility of the market value of assets, is the best predictor of observed leverage ratios.
The integration of Euro-area financial markets varies significantly in different market segments: money and inter-bank markets are highly integrated, corporate bond and equity markets show a clear path of increasing integration, while retail banking markets are much less integrated. Tax and bankruptcy rules differ across the twelve countries, as well as the economic background. As a consequence, nationality is still an important determinant of observed debt ratios, despite the monetary union.

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  • SW9783954898145

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  • Artikelnummer SW9783954898145
  • Autor find_in_page Marco Botta
  • Autoreninformationen Born in Como (Italy) in 1979, Marco Botta holds a BSc cum laude in… open_in_new Mehr erfahren
  • Verlag find_in_page Anchor Academic Publishing
  • Seitenzahl 167
  • Veröffentlichung 01.10.2014
  • ISBN 9783954898145

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