Financial constraints and development policies: evidence from Brazilian development bank loans
DOI:
https://doi.org/10.1590/1808-057x20262448.enKeywords:
targeted credit, development bank, subsidized credit, economic developmen, social developmentAbstract
This study maps patterns of credit allocation by the Brazilian National Bank for Economic and Social Development (Banco
Nacional de Desenvolvimento Econômico e Social [BNDES]) from 2002 to 2019, examining associations among firm
characteristics, regional disparities, and funding access. Previous research has mainly focused on listed firms or aggregate
measures, overlooking the broader business landscape. To address this, the paper assembles a granular dataset of 2,515
firms (1,537 beneficiaries and 978 non-beneficiaries), including both listed and private companies. Given BNDES’s systemic
weight, which historically accounts for over 15% of private credit and is tightly correlated with investment, understanding
its allocation is central to debates on market-failure correction and inclusive growth. The results reveal BNDES’s trade-offs:
funds reach disadvantaged regions and strategic sectors, yet systematically flow to firms able to provide collateral. This
challenges assumptions that public development banks primarily serve the most constrained firms and highlights tensions
between social objectives and financial sustainability. The study employs binary logistic models on a cross-sectional firmlevel sample, with explanatory variables including age, size, tangibility, liquidity, profitability, leverage, and dummies for
region, sector, listing, and group affiliation. A multinomial logistic model explores loan frequency, while propensity score
matching ensures robustness. BNDES lending shows clear regional and sectoral targeting: firms in the Northeast and utilities
are more likely to obtain credit. Beneficiaries tend to be older, more liquid, and more asset-tangible. The effects of firm size
are nuanced: smaller firms are more likely to access funds than larger ones, suggesting a risk-aware tilt within the bank’s
developmental mandate. This creates an “allocation paradox,” as support flows to priority regions and sectors but favors
lower-risk corporate profiles.
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