1 Department of Business Studies, Aarhus School of Business, Aarhus BSS, Aarhus University2 Finance Research Group, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
This empirical study of manufacturing firms (NAICS 33) in the EU15 countries shows that the introduction of the Euro has made Euro firms (firms based in one of the twelve Euro countries) more inclined than non-Euro firms (firms based in one of the three non-Euro countries: UK, Sweden and Denmark) to exercise real options such as to establish alliances / partnerships, to enter new markets / market segments, to switch suppliers, and to generally expand in the Euro-area. The results are robust after controlling for the size of the firms and their sales in the Euro-area. The results go beyond what is explicitly revealed in trade statistics and contribute to our understanding of the potential long-term effects of the Euro.
Euro; Euro membership; Real options
Main Research Area:
Financial Management Association European Conference, 2007