Role of equity and corporate bond financing in US economic growth. (4th January 2011)

• Record Type: Journal Article
• Authors: Banerjee, Prashanta K.; Rahman, Matiur
• Is Part Of: International journal of trade and global markets. Volume 4:Number 1(2011)
• Page Start: 13
• Page End: 24
• Publication Date: 2011-01-04
• Subjects: equity -- corporate bond financing -- cointegration -- USA -- United States -- economic growth; International trade -- Periodicals; Globalization -- Economic aspects -- Periodicals; 382.05
• Languages: English
• ISSNs: 1742-7541

Abstract

This paper re-examines the role of equity and corporate bond financing in spurring US economic growth. Annual data from 1960 through 2008 are utilised. The variables in levels are non-stationary with different orders of integration. Thus, the Autoregressive Distributed Lag (ARDL) procedure is applied for cointegration. The estimates of the Vector Error-Correction Model (VECM) unveil a robust long-run causal flow from the dual channels of financing to US economic growth. The short-run interactive effects are weakly positive.