I did the Presentation as a Graduate Assistant, while Dr. Nancy Yonge led me with the main points of the presentation.

1. 1
The Impact of the New EuropeanThe Impact of the New European
Financial ClimateFinancial Climate
onon
Corporate Decision MakingCorporate Decision Making
Presentation to:Presentation to:
National Business and Economic SocietyNational Business and Economic Society
Maui, HawaiiMaui, Hawaii
March 2002March 2002
Nancy Yonge, Ph.D., J.D.Nancy Yonge, Ph.D., J.D.
Regent UniversityRegent University

2. 2
OverviewOverview
• Elements of the New European Financial Climate: 3 Major ThemesElements of the New European Financial Climate: 3 Major Themes
- Creation of an Equity Culture- Creation of an Equity Culture
- Liberalization of Financial Markets- Liberalization of Financial Markets
- EMU and the Introduction of the EURO- EMU and the Introduction of the EURO
• Implications for Corporate Finance and Strategy DecisionsImplications for Corporate Finance and Strategy Decisions
- For European Companies- For European Companies
- For Non-European Companies- For Non-European Companies
• Final ThoughtsFinal Thoughts

3. 3
Elements of the New European Financial Climate:Elements of the New European Financial Climate:
Creation of an Equity CultureCreation of an Equity Culture
- Privatization and IPO’s during 1990’s- Privatization and IPO’s during 1990’s
- Founding of New Market Institutions- Founding of New Market Institutions
- Diffusion of Equity Ownership- Diffusion of Equity Ownership

4. 4
Market Liquidity of European MarketsMarket Liquidity of European Markets
for Emerging Companiesfor Emerging Companies
Exhibit attached on
overhead
transparences--Nancy
has them!

5. 5
Elements of the New European Financial Climate:Elements of the New European Financial Climate:
Liberalization of Financial MarketsLiberalization of Financial Markets
-- Desire for Foreign Direct InvestmentDesire for Foreign Direct Investment
- Desire for Foreign Portfolio Investment- Desire for Foreign Portfolio Investment
- Effects of Globalization and WTO- Effects of Globalization and WTO

6. 6
Elements of the New European Financial Climate:Elements of the New European Financial Climate:
EMU and the Introduction of the EUROEMU and the Introduction of the EURO
- EMU and its Meaning- EMU and its Meaning
- Significance of the EURO- Significance of the EURO
- EMU and its Future- EMU and its Future

7. 7
Implications for Corporate Financial and StrategyImplications for Corporate Financial and Strategy
DecisionsDecisions
European CompaniesEuropean Companies
- More Choices for Corporate Decision Makers- More Choices for Corporate Decision Makers
- Greater Simplicity and More Complexity- Greater Simplicity and More Complexity
- Need for Information and Technical Skills- Need for Information and Technical Skills
- Altered Risk/Reward Ratios- Altered Risk/Reward Ratios

8. 8
Implications for Corporate Financial and StrategyImplications for Corporate Financial and Strategy
DecisionsDecisions
Non-European CompaniesNon-European Companies
- More Opportunities for Portfolio Investments- More Opportunities for Portfolio Investments
- Greater Opportunities for FDI- Greater Opportunities for FDI
- Greater Simplicity and More Complexity- Greater Simplicity and More Complexity
- Altered Risk/Reward Ratios- Altered Risk/Reward Ratios

9. 9
Final ThoughtsFinal Thoughts
• Greater Simplicity and More ComplexityGreater Simplicity and More Complexity
• Convergence Toward the American ModelConvergence Toward the American Model
of Financial Markets Dynamicsof Financial Markets Dynamics
• Residual European ElementsResidual European Elements

10. 10
For Further InformationFor Further Information
If you have questions or desire additional information on this topicIf you have questions or desire additional information on this topic
or related issues in Dr. Yonge’s Research Portfolio on Internationalor related issues in Dr. Yonge’s Research Portfolio on International
Financial Markets, she may be contacted at:Financial Markets, she may be contacted at:
Regent University Northern Virginia Graduate CenterRegent University Northern Virginia Graduate Center
1650 Diagonal Road1650 Diagonal Road
Alexandria, Virginia 22314-2857Alexandria, Virginia 22314-2857
Tel. (703) 740 - 1429, Fax. (703) 740 - 1471Tel. (703) 740 - 1429, Fax. (703) 740 - 1471
E-mail: nancbor@regent.eduE-mail: nancbor@regent.edu

11. 11
Comparison of European MarketsComparison of European Markets
For Emerging CompaniesFor Emerging Companies
Market Location Liquidity
2001
(%)
Listed Companies
Number Domestic Non-Domestic
# (%) (%)
Nuovo Mercato Italy 11 45
Never Markt Germany 6 327 84 16
Nouveau Marché France 4 --
AIM United Kingdom 3 629 93 7
Nasdaq Europe United States 9 --
Source: Financial Times; Grant Thornton (2002)