The Effect of Institutions on the External Financing of The Brazilian Firms

Antonio Gledson De Carvalho ()
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Antonio Gledson De Carvalho: FGV-EAESP

Brazilian Review of Finance, 2009, vol. 7, issue 1, 1-27

Abstract: Based on an analysis across Brazilian states, this article investigates whether the level of institutional development affects the pattern of external financing of firms. The analysis is based on a unique dataset stratified across firms from 10 to 10,500 employees (of which 71.9 percent are micro and small firms), 13 Brazilian states and 9 industries. Our main results indicate that lack institutional development – measured through corruption and efficiency of the judicial system and financial development – makes the use of bank credit and formal sources less frequent. Moreover, this effect seems to be stronger for small firms.

Keywords: external financing; institutional development; external financing; institutional development (search for similar items in EconPapers)
JEL-codes: G21 G33 N26 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:brf:journl:v:7:y:2009:i:1:p:1-27

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