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The Effect of Institutions on the External Financing of The Brazilian Firms

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  • Antonio Gledson De Carvalho

    (FGV-EAESP)

Abstract

Based on an analysis across Brazilian states, this article investigates whether the level of institutional development affects the pattern of external financing of firms. The analysis is based on a unique dataset stratified across firms from 10 to 10,500 employees (of which 71.9 percent are micro and small firms), 13 Brazilian states and 9 industries. Our main results indicate that lack institutional development – measured through corruption and efficiency of the judicial system and financial development – makes the use of bank credit and formal sources less frequent. Moreover, this effect seems to be stronger for small firms.

Suggested Citation

  • Antonio Gledson De Carvalho, 2009. "The Effect of Institutions on the External Financing of The Brazilian Firms," Brazilian Review of Finance, Brazilian Society of Finance, vol. 7(1), pages 1-27.
    • Handle: RePEc:brf:journl:v:7:y:2009:i:1:p:1-27
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    Cited by:

    1. Zhiyong An, 2017. "Private Property Rights and Capital Structure: Empirical Evidence from the 2004 Constitutional Amendment in China," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 173(3), pages 454-469, September.
    2. Cláudio Júnior Bernardo & Tatiana Albanez & José Roberto Securato, 2018. "Macroeconomic and Institutional Factors, Debt Composition and Capital Structure of Latin American Companies," Brazilian Business Review, Fucape Business School, vol. 15(2), pages 152-174, March.

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    More about this item

    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean

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