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Journal article

Relaxing credit constraints in emerging economies: The impact of public loans on the productivity of Brazilian manufacturers


In emerging economies credit constraints are often perceived as one of the most important market frictions hampering firm productivity growth in manufacturing. Huge amount of public money is devoted to the removal of such constraints but its effectiveness is still subject to an intense policy debate. This paper contributes to this debate by analyzing the effects of the Brazilian Development Bank (BNDES) loans. Exploiting the unique features of a dataset on BNDES loans to Brazilian manufactures, it finds that credit constraints facing Brazilian manufacturing firms are real, in particular for firms that apply to BNDES repeatedly, and BNDES support has allowed granted firms to match the performance of similar unconstrained firms but not to outperform them.


Filipe Lage de Sousa and Gianmarco I. P. Ottaviano

1 August 2018


International Economics 154, pp.23-47, 2018


DOI: 10.1016/j.inteco.2017.11.002

This Journal article is published under the centre's Trade programme.