Relaxing Credit Constraints in Emerging Economies: The Impact of Public Loans on the Performance of Brazilian Manufacturers

Gianmarco Ottaviano and Filipe Lage de Sousa ()
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Filipe Lage de Sousa: World Bank and Universidade Federal Fluminense

No 369, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: Especially in developing countries credit constraints are often perceived as one of the most important market frictions constraining firm innovation and growth. Huge amounts of public money are being devoted to the removal of such constraints but their effectiveness is still subject to an intense policy debate. This paper contributes to this debate by analysing the effects of the Brazilian Development Bank (BNDES) loans. It finds that, before receiving BNDES support, granted firms are indeed more credit constrained than comparable non-granted firms. It also finds that BNDES support allows granted firms to achieve the same level of performance as similar non-granted firms that are not credit constrained. However, it does not allow granted firms to outperform similar non-granted ones.

Keywords: heterogeneous firms; productivity; public policy analysis; credit constraints (search for similar items in EconPapers)
JEL-codes: H00 O38 (search for similar items in EconPapers)
Pages: 30
Date: 2014-06-26, Revised 2014-06-26
New Economics Papers: this item is included in nep-cse and nep-eff
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Relaxing Credit Constraints in Emerging Economies: The Impact of Public Loans on the Performance of Brazilian Manufacturers (2014)
Working Paper: Relaxing credit constraints in emerging economies: the impact of public loans on the performance of Brazilian manufacturers (2014)
Working Paper: Relaxing credit constraints in emerging economies: The impact of public loans on the performance of Brazilian manufacturers (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:369

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