Halliday & Matthiessen (2014: 605-6):
While conjunction (including continuity) links whole clauses or combinations of clauses, reference creates cohesion by creating links between elements. It is a relationship between things, or facts (phenomena, or metaphenomena); it may be established at varying distances, and although it usually serves to relate single elements that have a function within the clause (processes, participants, circumstances), it can give to any passage of text the status of a fact, and so turn it into a clause participant.