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Public Credit Programmes and Firm Performance in Brazil
Author(s) -
Maffioli Alessandro,
Negri Joao A.,
Rodriguez Cesar M.,
VazquezBare Gonzalo
Publication year - 2017
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/dpr.12250
Subject(s) - credit rationing , business , differential (mechanical device) , export credit agency , differential effects , wage , trade credit , credit reference , phenomenon , credit history , finance , credit enhancement , financial system , economics , labour economics , credit risk , interest rate , aerospace engineering , medicine , physics , quantum mechanics , engineering
Credit rationing is a common phenomenon faced by firms, one that has negative implications for long‐term investments. In Brazil, public credit plays a key role in supporting firms: state‐owned banks account for almost half of the outstanding credit. Public credit programmes aim at reducing credit restrictions, increasing competitiveness and job creation for small and medium enterprises. This article analyzes the effectiveness of the credit lines managed by two main public institutions in Brazil. Results show that access to public credit lines has a significant positive impact on firms’ employment growth and exports, while no effect was found on wage differential. The impact on exports is driven by the increase in volumes among exporting firms rather than the probability of becoming an exporter.