The impact of Petrobras spending on economic cycles

Edmundo Inacio (), Cassio Garcia Ribeiro (), Carolina Baltar, Rosangela Ballini () and Yanchao Li ()
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Edmundo Inacio: University of Campinas (UNICAMP)
Cassio Garcia Ribeiro: Federal University of Uberlândia (UFU)
Rosangela Ballini: University of Campinas (UNICAMP)
Yanchao Li: Energy and Extractives Global Practice Specialist

Portuguese Economic Journal, 2024, vol. 23, issue 3, No 5, 459-485

Abstract: Abstract Public spending influences a country’s economic activities due to its effect on aggregate demand. Although existing research has focused on government expenditures to understand the multiplier impacts of public spending, there is scant literature focusing on the spending of state-owned enterprises (SOEs), especially in strategic sectors such as the oil sector. This study analyzes the spending behaviour of an important Brazilian SOE, Petrobras, to understand its consequences to the Brazilian economic activity. The results suggest that multiplier impacts during recessions are bigger than those during economic expansions. The accumulated multiplier of Petrobras’s investment expenditures is higher compared to current spending, especially in periods of recession. Moreover, the forecast error variance decomposition showed the impact that changes in government spending in Petrobras had on the Brazilian GDP growth in periods of expansion and contraction.

Keywords: Petrobras; Multipliers; Non-linear model; Time series; MS-VAR (search for similar items in EconPapers)
JEL-codes: C13 E17 H39 H54 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10258-023-00241-6

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