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.
Int. J. of Trade and Global Markets, 2011 Vol.4, No.1, pp.13 - 24
Available online: 03 Jan 2011