Corporate Self-Financing and Economic Growth

Ricardo Bebczuk () and Maria Garegnani ()

Ensayos Económicos, 2007, vol. 1, issue 47, 63-91

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.

Keywords: corporate self-financing; corporate investment; economic growth; pooled mean group estimator (search for similar items in EconPapers)
JEL-codes: C33 G32 O16 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:bcr:ensayo:v:1:y:2007:i:47:p:63-91

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