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Relaxing credit constraints in emerging economies: the impact of public loans on the performance of Brazilian manufacturers

Lage de Sousa, Philip and Ottaviano, Gianmarco I. P. (2014) Relaxing credit constraints in emerging economies: the impact of public loans on the performance of Brazilian manufacturers. CEP Discussion Papers (CEPDP1309). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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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.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2014 The Authors
Divisions: Economics
Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
JEL classification: H - Public Economics > H0 - General > H00 - General
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O38 - Government Policy
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 17 Dec 2014 09:51
Last Modified: 20 Aug 2019 23:27
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/60529

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