THE IMPACT OF INTEREST RATE SPREADS FOR EURO DENOMINATED LOANS ON THE LEVERAGE RATIO OF ROMANIAN LISTED COMPANIES

It has been recently showed in the literature that financial markets integration matters not only from a macroeconomic perspective but also at microeconomic level. In this context, the present paper aims at investigating the impact of integration between the banking markets in Romania and the euro area on the financing decisions of Romanian companies. The research is based on a sample of listed companies and uses quarterly data. By employing measures of integration between the Romanian and the euro area banking markets based on interest rate spreads to euro denominated loans over the euro area average granted by monetary financial institutions to non-financial corporations, the results show that there is a limited effect of integration between the two markets on the leverage ratio of Romanian companies. The impact of traditional firm-level factors is broadly confirmed