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Using a sample of non-financial listed firms located in the Euro area, the determinants of capital structure decisions in the years 2000-2003 are investigated in this study. In line with the traditional theoretical approach and in contrast with traditional empirical literature, the study is based on a market-value measure of leverage, estimated with the Merton model. In a cross-section regressions some variables have similar effects on financing decisions across countries, while others may play a different role; risk, measured as the volatility of the market value of assets, is the best predictor of observed leverage ratios.
The integration of Euro-area financial markets varies significantly in different market segments: money and inter-bank markets are highly integrated, corporate bond and equity markets show a clear path of increasing integration, while retail banking markets are much less integrated. Tax and bankruptcy rules differ across the twelve countries, as well as the economic background. As a consequence, nationality is still an important determinant of observed debt ratios, despite the monetary union.

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Born in Como (Italy) in 1979, Marco Botta holds a BSc cum laude in financial economics from the Università Cattolica del Sacro Cuore, an MSc in Economics and Finance, awarded with distinction, from the Warwick Business School at the University of Warwick and a PhD in Economics from the Università Cattolica del Sacro Cuore.
He now works as a business consultant at his firm Studio Botta Consulenza Aziendale, based in Como, and teaches Corporate Finance to graduate students of the MSc in Banking and Finance at the Università Cattolica del Sacro Cuore.
His research interests are in corporate finance, performance measurement and applied econometrics.
He also holds the position of adjunct professor at the Università degli Studi dell Insubria, where he teaches Principles of Economics to undergraduate students of the BSc in Industrial Chemistry.
A former fencer, he currently holds the position of delegate of the Italian Olympic Committee for the province of Como.

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