Efficient Financial Allocation and Productivity Growth in Brazil

This paper attempts to study the impact of Brazilian Development Bank credit on resource misallocation in Brazil, using manufacturing firm-level data from 2003-14. The paper first estimates measures of resource misallocation based on Hsieh and Klen...

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Main Authors:	Calice, Pietro, Ribeiro, Eduardo P., Byskov, Steen
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	ACCESS TO FINANCE ACCESS TO CREDIT MISALLOCATION PUBLIC CREDIT PRODUCTIVITY DISTORTIONS RESOURCE ALLOCATION
Online Access:	http://documents.worldbank.org/curated/en/640271529435346695/Efficient-financial-allocation-and-productivity-growth-in-Brazil http://hdl.handle.net/10986/29932

id	okr-10986-29932
recordtype	oai_dc
spelling	okr-10986-299322021-06-08T14:42:46Z Efficient Financial Allocation and Productivity Growth in Brazil Calice, Pietro Ribeiro, Eduardo P. Byskov, Steen ACCESS TO FINANCE ACCESS TO CREDIT MISALLOCATION PUBLIC CREDIT PRODUCTIVITY DISTORTIONS RESOURCE ALLOCATION This paper attempts to study the impact of Brazilian Development Bank credit on resource misallocation in Brazil, using manufacturing firm-level data from 2003-14. The paper first estimates measures of resource misallocation based on Hsieh and Klenow (2009), documenting high variation in firms' capital and output distortions. It then estimates the effect of financial frictions and access to Brazilian Development Bank loans on distortions and their dispersions. The analysis finds some preliminary evidence that the use of Brazilian Development Bank credit is not associated with a more efficient allocation of resources. The lower cost of Brazilian Development Bank loans reduces the marginal cost of capital, as it induces firms to reallocate inputs from labor to capital, and this effect is amplified for more financially dependent firms. The findings, together with extant evidence on the economic additionality of the Brazilian Development Bank, suggest that there is room for improving the allocative efficiency of the earmarked credit system in Brazil. 2018-06-27T21:36:19Z 2018-06-27T21:36:19Z 2018-06 Working Paper http://documents.worldbank.org/curated/en/640271529435346695/Efficient-financial-allocation-and-productivity-growth-in-Brazil http://hdl.handle.net/10986/29932 English Policy Research Working Paper;No. 8479 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Brazil
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCESS TO FINANCE ACCESS TO CREDIT MISALLOCATION PUBLIC CREDIT PRODUCTIVITY DISTORTIONS RESOURCE ALLOCATION
spellingShingle	ACCESS TO FINANCE ACCESS TO CREDIT MISALLOCATION PUBLIC CREDIT PRODUCTIVITY DISTORTIONS RESOURCE ALLOCATION Calice, Pietro Ribeiro, Eduardo P. Byskov, Steen Efficient Financial Allocation and Productivity Growth in Brazil
geographic_facet	Latin America & Caribbean Brazil
relation	Policy Research Working Paper;No. 8479
description	This paper attempts to study the impact of Brazilian Development Bank credit on resource misallocation in Brazil, using manufacturing firm-level data from 2003-14. The paper first estimates measures of resource misallocation based on Hsieh and Klenow (2009), documenting high variation in firms' capital and output distortions. It then estimates the effect of financial frictions and access to Brazilian Development Bank loans on distortions and their dispersions. The analysis finds some preliminary evidence that the use of Brazilian Development Bank credit is not associated with a more efficient allocation of resources. The lower cost of Brazilian Development Bank loans reduces the marginal cost of capital, as it induces firms to reallocate inputs from labor to capital, and this effect is amplified for more financially dependent firms. The findings, together with extant evidence on the economic additionality of the Brazilian Development Bank, suggest that there is room for improving the allocative efficiency of the earmarked credit system in Brazil.
format	Working Paper
author	Calice, Pietro Ribeiro, Eduardo P. Byskov, Steen
author_facet	Calice, Pietro Ribeiro, Eduardo P. Byskov, Steen
author_sort	Calice, Pietro
title	Efficient Financial Allocation and Productivity Growth in Brazil
title_short	Efficient Financial Allocation and Productivity Growth in Brazil
title_full	Efficient Financial Allocation and Productivity Growth in Brazil
title_fullStr	Efficient Financial Allocation and Productivity Growth in Brazil
title_full_unstemmed	Efficient Financial Allocation and Productivity Growth in Brazil
title_sort	efficient financial allocation and productivity growth in brazil
publisher	World Bank, Washington, DC
publishDate	2018
url	http://documents.worldbank.org/curated/en/640271529435346695/Efficient-financial-allocation-and-productivity-growth-in-Brazil http://hdl.handle.net/10986/29932
_version_	1764470839687774208

Efficient Financial Allocation and Productivity Growth in Brazil

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