Abstract
The present paper distinguishes how the type of bank that provides loans is related to GDP per capita in Brazilian municipalities between 2007 and 2016. A unique data set allows us to discriminate between the effects of credits operated by either private or public commercial banks, and loans provided by the national development bank BNDES either directly or indirectly through accredited financial institutions. Using the system GMM estimator, we find that credit from public commercial banks has the highest effect on economic growth but it is concentrated in the most populated municipalities. Moreover, indirect BNDES loans show a robust and significantly positive relation to local GDP given that this lending facility especially targets firms in small, credit constrained regions, and it was provided non-cyclically.
Keywords:
Development banks; State-owned banks; Regional growth; BNDES
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Notes: The scale represents the size of the average credit stock per capita in R$ in each municipality and each of the four different credit types considered here, namely credit from public banks (excluding the BNDES), private banks and the BNDES’ direct and indirect credit. That is, municipalities in the highest group, above 300, have an average credit value of over R$ 300 per individual.
Notes: The vertical axis displays the level of credit stock in each of the four modalities relative to their level in 2007 which is normalized to 100. The upper graph on the laft hand side shows the aggregate values for Brazil. The upper graph on the right hand side refers to loans in the largest municipalities with a population above 100,000 inhabitants, as defined in table 3. The lower graph on the left and on the right refer to middle and small sized municipalities, respectively.