Investment of Firms in Brazil: Do Financial Restrictions, Unexpected Monetary Shocks and BNDES Play Important Roles?
Keywords:Investment, Unexpected Monetary Shocks, Firms Financially Restricted, BNDES
Our objective in this paper is to estimate the dynamics of firm investment in Brazil. For this purpose, we built an original database with confidential and public data containing balance sheet and financial information of 4,876 public and private firms from 1995 to 2010. We then classify these firms as financially restricted or not. Our results show that unexpected monetary shocks, financial restrictions and Brazil´s development bank, BNDES, financing policies are very important to explain the dynamics of investment in Brazil. Our results are robust to several model specifications and econometric techniques.
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