Fons van Overbeek
- 6 August 2025
- OCCASIONAL PAPER SERIES - No. 373Details
- Abstract
- The European Union (EU) economy depends heavily on bank funding. For this reason, strengthening EU equity markets as an alternative funding source has been a policy priority under the Capital Markets Union (CMU) agenda, and more recently a key feature of the Savings and Investment Union (SIU). EU listed equity markets are smaller and structurally different from those in the United States (US), with differing market capitalisations of listed firms and differences in the number of companies listed, stemming from lower initial public offering (IPO) activity in Europe. This paper aims to understand the drivers behind the EU-US listing gap, focusing on two aspects: (1) the general firm-level benefits of listing, and (2) whether pre-listing financing opportunities in the EU are underdeveloped, hindering firm growth and ultimately market depth. This paper first puts forward an empirical analysis to assess how a firm’s decision to list impacts various key performance indicators, with a view to assessing the implications of listing for the economy at large. Second, it zooms in on innovative firms to shed light on the primary challenges faced by EU startups in their funding pipelines, with a focus on late-stage equity financing and venture capital (VC) markets. Focusing on the euro area (EA) as a proxy to derive broader benefits of listing in the EU, we find that EA companies’ key profitability measures, employment, innovation capacity and productivity all increase after listing – and are thus indicative of wider economic benefits. This is, however, associated with challenges for the long-term investment strategies of listed companies, such as potential short-termism – a topic widely studied in the literature. Moreover, a comparison with the US suggests that, while the benefits and risks of listing are qualitatively similar on the other side of the Atlantic, EA companies seem to benefit somewhat less from listing than their US peers. […]
- JEL Code
- G10 : Financial Economics→General Financial Markets→General
G30 : Financial Economics→Corporate Finance and Governance→General
L10 : Industrial Organization→Market Structure, Firm Strategy, and Market Performance→General
L50 : Industrial Organization→Regulation and Industrial Policy→General
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
L21 : Industrial Organization→Firm Objectives, Organization, and Behavior→Business Objectives of the Firm
L25 : Industrial Organization→Firm Objectives, Organization, and Behavior→Firm Performance: Size, Diversification, and Scope
- 11 March 2025
- OCCASIONAL PAPER SERIES - No. 369Last updated on 19 May 2025Details
- Abstract
- The European Union needs a single market for capital. Well-developed and integrated capital markets are necessary to support economic growth and resilience across the region, while offering benefits for businesses, households and financial stability. This paper examines the importance of the CMU for achieving five strategic objectives: supporting innovation and productivity, financing the twin transition, shoring up pension savings, strengthening alternatives to bank financing, and fostering convergence and inclusion. It highlights the progress made over the past decade, the challenges encountered and the renewed impetus behind the CMU initiative. The paper proposes concrete steps for moving forward, building on long-standing priorities supported by the ECB and the current policy debate on the CMU. First, it suggests facilitating access to capital markets by creating a new standard for a European savings and investment product. Second, it emphasises the importance of expanding capital markets across borders. This would be facilitated by making improvements towards achieving a more integrated supervisory ecosystem, establishing an integrated trading and post-trading landscape that leverages potential benefits of the digital transition, and a more active securitisation market that does not compromise on financial stability. Third, the paper highlights the need to channel capital towards innovative and competitive firms by increasing opportunities for equity and venture capital financing. These actions should be complemented by longer-term initiatives. They would include the ongoing commitment to address obstacles stemming from the lack of harmonisation of insolvency laws, corporate and taxation regimes, designing a safe asset for Europe, completing the banking union, and promoting financial literacy and inclusion.
- JEL Code
- E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
G51 : Financial Economics
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
- 21 September 2021
- OCCASIONAL PAPER SERIES - No. 265Details
- Abstract
- This paper – which takes into consideration overall experience with the Harmonised Index of Consumer Prices (HICP) as well as the improvements made to this measure of inflation since 2003 – finds that the HICP continues to fulfil the prerequisites for the index underlying the ECB’s definition of price stability. Nonetheless, there is scope for enhancing the HICP, especially by including owner-occupied housing (OOH) using the net acquisitions approach. Filling this long-standing gap is of utmost importance to increase the coverage and cross-country comparability of the HICP. In addition to integrating OOH into the HICP, further improvements would be welcome in harmonisation, especially regarding the treatment of product replacement and quality adjustment. Such measures may also help reduce the measurement bias that still exists in the HICP. Overall, a knowledge gap concerning the exact size of the measurement bias of the HICP remains, which calls for further research. More generally, the paper also finds that auxiliary inflation measures can play an important role in the ECB’s economic and monetary analyses. This applies not only to analytical series including OOH, but also to measures of underlying inflation or a cost of living index.
- JEL Code
- C43 : Mathematical and Quantitative Methods→Econometric and Statistical Methods: Special Topics→Index Numbers and Aggregation
C52 : Mathematical and Quantitative Methods→Econometric Modeling→Model Evaluation, Validation, and Selection
C82 : Mathematical and Quantitative Methods→Data Collection and Data Estimation Methodology, Computer Programs→Methodology for Collecting, Estimating, and Organizing Macroeconomic Data, Data Access
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy