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Credit scarcity in developing countries: An empirical investigation using Brazilian firm-level data

Author

Listed:
  • Antônio Marcos Hoelz Pinto Ambrozio

    (Pontifícia Universidade Católica (PUC-RJ))

  • Filipe Lage de Sousa

    (Universidade Federal Fluminese (UFF))

  • João Paulo Martin Faleiros

    (Brazilian Development Bank (BNDES))

  • André Albuquerque Sant'Anna

    (Universidade Federal do Rio de Janeiro (UFRJ))

Abstract

The aim of this paper is to investigate whether Brazilian manufacturing firms are credit constrained. We exploit a rich database that contains more than three thousand firms with characteristics that may affect their degree of credit constraint: size, being listed in the Brazilian stock market and level of exports-sales ratio. Our results show that all dimensions considered here may affect the sensitiveness of investment to cash flow. Large firms, stock market listed firms as well as firms with better export capacity are associated with inexistence or less credit restriction. Specifically, considering firms' size, our results corroborate the economic theory prediction and empirical international literature. Furthermore, the influence of being listed in the stock market and export capacity is beyond any possible correlation with size. Even small and middle firms are not credit constrained when listed in the stock market or when the exports-sales ratio is higher

Suggested Citation

  • Antônio Marcos Hoelz Pinto Ambrozio & Filipe Lage de Sousa & João Paulo Martin Faleiros & André Albuquerque Sant'Anna, 2017. "Credit scarcity in developing countries: An empirical investigation using Brazilian firm-level data," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 17(1), pages 73-87.
    • Handle: RePEc:anp:econom:v:18:y:2017:1:73_87
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    Cited by:

    1. Lage de Sousa, Filipe & Ottaviano, Gianmarco I.P., 2018. "Relaxing credit constraints in emerging economies: The impact of public loans on the productivity of Brazilian manufacturers," International Economics, Elsevier, vol. 154(C), pages 23-47.
    2. Gomes, Matheus da Costa & Valle, Mauricio Ribeiro do, 2023. "Do companies that benefit from development banks' funding invest more? New evidence from Brazil," Economic Modelling, Elsevier, vol. 127(C).

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    More about this item

    Keywords

    Credit constraint; Firms' investment; Cash flow; Exports; Stock market;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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