The Impact of Public Credit Programs on Brazilian Firms

This paper analyzes the effectiveness of public credit lines in promoting the performances of Brazilian firms. We focus on the impact of the credit lines managed by BNDES and FINEP in fostering growth measured in terms of employment, labor productivity and export. For this purpose, we use a unique panel data set developed by the Instituto de Pesquisa Econômica Aplicada (IPEA), which includes information on both firm-level performances and access to public credit lines. This particular data setting allows us to use quasi-experimental techniques to control for selection bias when estimating the impact of the public credit lines. The core of our estimation strategy is based on a difference-in-differences technique, which we complement with matching methods for robustness check. Our results consistently show that access to public credit lines has a significant and robust positive impact on employment growth and exports, while we do not find evidence of a significant effect on our measure of productivity. Interestingly enough, our findings show that impact on exports is driven by the increase in export volumes among exporting firms, while no significant effect on the probability of becoming an exporter is detected.