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Role of equity and corporate bond financing in US economic growth

Author

Listed:
  • Prashanta K. Banerjee
  • Matiur Rahman

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.

Suggested Citation

  • Prashanta K. Banerjee & Matiur Rahman, 2011. "Role of equity and corporate bond financing in US economic growth," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 4(1), pages 13-24.
    • Handle: RePEc:ids:ijtrgm:v:4:y:2011:i:1:p:13-24
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