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Corporate Self-Financing and Economic Growth

Author

Listed:
  • Ricardo Bebczuk

    (Central Bank of Argentina)

  • Lorena Garegnani

    (Central Bank of Argentina)

Abstract

This 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.

Suggested Citation

  • Ricardo Bebczuk & Lorena Garegnani, 2007. "Corporate Self-Financing and Economic Growth," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(47), pages 63-91, April - J.
    • Handle: RePEc:bcr:ensayo:v:1:y:2007:i:47:p:63-91
    as

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    File URL: http://www.bcra.gov.ar/pdfs/investigaciones/Autofinanciamientoycrecimiento.pdf
    File Function: Spanish version (versión en Español)
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    More about this item

    Keywords

    corporate self-financing; corporate investment; economic growth; pooled mean group estimator;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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