Int. J. of Trade and Global Markets   »   2011 Vol.4, No.1



Title: Role of equity and corporate bond financing in US economic growth


Author: Prashanta K. Banerjee, Matiur Rahman


School of Business, King Faisal University, P.O. Box 1760, Al-Hassa 31982, Kingdom of Saudi Arabia.
McNeese State University, Lake Charles, LA70609, USA


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.


Keywords: equity; corporate bond financing; cointegration; USA; United States; economic growth.


DOI: 10.1504/IJTGM.2011.037886


Int. J. of Trade and Global Markets, 2011 Vol.4, No.1, pp.13 - 24


Available online: 03 Jan 2011



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