BNDES FINANCING AND LABOR PRODUCTIVITY IN BRAZIL: AN ANALYSIS BY COMPANY SIZE
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Abstract
The question of productivity gains among micro and small enterprises in response to economic incentives remains underexplored in the academic literature. What exists is a multitude of unresolved questions. This applied study seeks to shed light on a topic that has long been overlooked in discussions about the efficiency of public spending in general —and the role of the Banco Nacional de Desenvolvimento Econômico e Social (BNDES) in particular— in fostering corporate productivity. Accordingly, this research set out to examine the effects of BNDESfinancing on the productivity of Brazilian firms, segmented by size and sector. The analysis employed both traditional econometric models (ordinary least squares and fixed effects) and system GMM models to address endogeneity issues. The results support the argument that micro and small enterprises —despite having more rudimentary production and management structures— experience greater productivity gains when granted access to BNDES funding.
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References
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