Mortgages for machinery: credit and industrial investment in pre-World War I Brazil

Gustavo Cortes, Renato L. Marcondes and Maria Dolores Diaz

Financial History Review, 2014, vol. 21, issue 2, 191-212

Abstract: How could a primitive credit market finance the early industrialisation of an underdeveloped economy? To answer this question, we use a hand-collected data set of mortgage loans raised by industrial firms in the city of São Paulo during the period 1866-1914. These mortgages were debt obligations collateralised by land, improvements, machinery and equipment. We argue that the mortgage credit market was a key source of funding for early industrial investments in Brazil. We find that industries were mainly funded by non-banking and domestic agents. The empirical evidence suggests that mortgages were an important proxy for industrial investment.

Date: 2014
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Working Paper: Beyond Banks and Stocks: A Study of Industrial Mortgages for the City of São Paulo, Brazil (1866-1914) (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:fihrev:v:21:y:2014:i:02:p:191-212_00

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