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Mortgages for machinery: credit and industrial investment in pre-World War I Brazil

Author

Listed:
  • Cortes, Gustavo S.
  • Marcondes, Renato L.
  • Diaz, Maria Dolores M.

Abstract

How could a primitive credit market finance the early industrialisation of an underdeveloped economy? To answer this question, we use a hand-collected data set of mortgage loans raised by industrial firms in the city of São Paulo during the period 1866-1914. These mortgages were debt obligations collateralised by land, improvements, machinery and equipment. We argue that the mortgage credit market was a key source of funding for early industrial investments in Brazil. We find that industries were mainly funded by non-banking and domestic agents. The empirical evidence suggests that mortgages were an important proxy for industrial investment.

Suggested Citation

  • Cortes, Gustavo S. & Marcondes, Renato L. & Diaz, Maria Dolores M., 2014. "Mortgages for machinery: credit and industrial investment in pre-World War I Brazil," Financial History Review, Cambridge University Press, vol. 21(2), pages 191-212, August.
    • Handle: RePEc:cup:fihrev:v:21:y:2014:i:02:p:191-212_00
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    JEL classification:

    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • N66 - Economic History - - Manufacturing and Construction - - - Latin America; Caribbean
    • N86 - Economic History - - Micro-Business History - - - Latin America; Caribbean

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