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Measuring the aggregate effects of the Brazilian Development Bank on investment

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  • de Menezes Barboza, Ricardo
  • Vasconcelos, Gabriel F.R.

Abstract

In this paper, we show that the Brazilian Development Bank (BNDES), one of the largest development banks in the world, had a positive and statistically significant impact on Brazilian aggregate investment during the 2002–2016 period. Each $1 BRL of BNDES loans increased the investment on average by $0.46 BRL. Our results lie between what is alleged by BNDES critics (zero impact) and what is claimed by unconditional advocates of state-owned banks (impact near one). In addition, our results are compatible with micro evidence on the effects of BNDES. We obtained these results using the impulse responses from a large Bayesian VAR and we used double selection inference for robustness.

Suggested Citation

  • de Menezes Barboza, Ricardo & Vasconcelos, Gabriel F.R., 2019. "Measuring the aggregate effects of the Brazilian Development Bank on investment," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 223-236.
    • Handle: RePEc:eee:ecofin:v:47:y:2019:i:c:p:223-236
    DOI: 10.1016/j.najef.2018.12.013
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