We compare how bond market access affects firms' investment decisions in the United States and the euro area. Having a bond rating enables US corporations to invest more and undertake more acquisitions. In contrast, in the euro area, bond ratings have no effect on investment decisions....

The introduction of the Euro has led to price level stability and fostered growth within the European Union. Consequently, since its launch as a store of value and unit of account, there has been a clear convergence between the yield of France’s sovereign debt and German benchmark. This paper...

We present a model with agency costs where heterogeneous firms raise finance through either bank loans or corporate bonds, and where banks are more efficient than the market in resolving informational problems. The model is used to analyze some major long-run differences in corporate finance...