Corporate Self-Financing and Economic Growth
AbstractThis paper analyzes the advantages and disadvantages of corporate self-financing from de perspective of corporative finance in order to evaluate its macroeconomic consequences. Specifically, a corporate self-financing coefficient is calculated for a group of 15 countries of OECD during the period 1970-2003. Using recent panel data methods, this paper studies the long-run effect of the corporate self-financing coefficient on the corporate investment, the total factor productivity and the output growth. The findings clearly suggest, in apparent contradiction with the literature on financial development, a strong and positive long run relationship between growth and self-financing. Important lessons are derived for the recent argentine case.
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Bibliographic InfoArticle provided by Central Bank of Argentina, Economic Research Department in its journal Ensayos Económicos.
Volume (Year): 1 (2007)
Issue (Month): 47 (April - June)
corporate self-financing; corporate investment; economic growth; pooled mean group estimator;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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