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

Lage de Sousa, Filipe and Ottaviano, Gianmarco I. P. (2017) Relaxing credit constraints in emerging economies: the impact of public loans on the productivity of Brazilian manufacturers. International Economics. ISSN 2110-7017

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Identification Number: 10.1016/j.inteco.2017.11.002

Abstract

In emerging economies credit constraints are often perceived as one of the most important market frictions hampering firm productivity growth in manufacturing. Huge amount of public money is devoted to the removal of such constraints but its effectiveness is still subject to an intense policy debate. This paper contributes to this debate by analyzing the effects of the Brazilian Development Bank (BNDES) loans. Exploiting the unique features of a dataset on BNDES loans to Brazilian manufactures, it finds that credit constraints facing Brazilian manufacturing firms are real, in particular for firms that apply to BNDES repeatedly, and BNDES support has allowed granted firms to match the performance of similar unconstrained firms but not to outperform them.

Item Type: Article
Official URL: https://www.sciencedirect.com/science/article/pii/...
Additional Information: © 2017 Elsevier
Divisions: Economics
Subjects: H Social Sciences > HJ Public Finance
JEL classification: G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H25 - Business Taxes and Subsidies
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O38 - Government Policy
Sets: Departments > Economics
Date Deposited: 01 Mar 2018 16:01
Last Modified: 15 May 2019 23:00
URI: http://eprints.lse.ac.uk/id/eprint/86923

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