Financing Through Bond Issues and the Nexus with Economic Growth

Europainstitut Working Paper No. 68

52 Pages Posted: 27 Jul 2007

See all articles by Gerhard Fink

Gerhard Fink

Dept of International Business and Trade

Peter R. Haiss

WU Vienna University of Economics and Business; UniCredit Bank Austria; IES Vienna - Institute for the International Education of Students

Herwig Kirchner

affiliation not provided to SSRN

Ulrike Thorwartl

affiliation not provided to SSRN

Date Written: September 2005

Abstract

This paper examines for the first time the relationship between the net issue values of aggregate bonds, as well as the different bond sectors separately, and economic growth. The other new feature of this study is the usage of quarterly data. Granger causalities are calculated for time series of 15 European countries, the USA, and Japan in order to test if there is a positive relationship between the development of bond markets and economic growth also for shorter time periods. The significant Granger causalities found show the following tendency: Economic growth is causal for net issue values of government bonds, and net issuance of corporate and financial institutions bonds are causal for economic growth. That finding is important for the future architecture of the financial sector, in particular in emerging markets and the new EU member countries.

Keywords: bond markets, economic growth, Granger causalities

JEL Classification: E44, O16, O40

Suggested Citation

Fink, Gerhard and Haiss, Peter R. and Kirchner, Herwig and Thorwartl, Ulrike, Financing Through Bond Issues and the Nexus with Economic Growth (September 2005). Europainstitut Working Paper No. 68, Available at SSRN: https://ssrn.com/abstract=1003352 or http://dx.doi.org/10.2139/ssrn.1003352

Gerhard Fink

Dept of International Business and Trade ( email )

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Peter R. Haiss (Contact Author)

WU Vienna University of Economics and Business ( email )

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Herwig Kirchner

affiliation not provided to SSRN ( email )

No Address Available

Ulrike Thorwartl

affiliation not provided to SSRN ( email )

No Address Available

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