Corporate bonds, exchange rates and memorandum: Evidence from Greece and Ireland

In this article, we examine the success rate of the memorandum in two peripheral eurozone countries (Ireland and Greece) that had significant differences in organisational structures and their development models. For this reason, we measure the quantile dependence between the returns of corporate bond investors and exchange rates employing a novel econometric methodology, the cross‐quantilogram. In Ireland, our key findings exhibit a higher rate of absorbing of structural reforms which contributes to more steady reinforcement of the enterprises, whether the European economy is stronger than the US or not. In contrast, Greece where the structural reforms are more intense, show a similar picture over a period longer than that of Ireland and only when the European economy goes beyond the US economy.