Industry and Securities Market Influences on Indebtedness: evidence from a large dataset from Brazil

Flavio Docha and Luiza Rodrigues

No 586, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: This article presents an unprecedented database, “Alexandria”, which consolidates a panel with more than 40 thousand Brazilian companies, of which 31 thousand are non-financial companies (NFCs). It then uses it to investigate the influence of “industry affiliation” and “participation in the securities market” on the level of indebtedness of NFCs from 2015 to 2021. The conclusions are as follows: (i) industry is important to explain the average and median level of indebtedness, especially among non-CVM companies, and "Agriculture", "Construction" and "Real Estate Services" are the least indebted industries; (ii) participation in the securities market seems to increase indebtedness, but the evidence is weaker than that obtained for the industry; and (iii) there is great heterogeneity in indebtedness, even within the same industry, especially among companies outside the securities market. These results suggest that studies based solely on listed companies fail to capture the heterogeneity of corporate debt strategies.

Date: 2023-10
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