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Financial constraints and investment decisions: evidence from a highly unstable emerging economy

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  • Aquiles Elie Guimaraes Kalatzis
  • Carlos Roberto Azzoni
  • Jorge Alberto Achcar

Abstract

This study analyses the role of financial constraints on the investment decisions of 497 Brazilian firms. We use panel data, with firm-specific information for different years, allowing for the abandonment of the representative firm model. Information on capital intensity at the firm level is used to group firms. We estimate different models and the results suggest the presence of financial restrictions, especially for capital-intensive firms.

Suggested Citation

  • Aquiles Elie Guimaraes Kalatzis & Carlos Roberto Azzoni & Jorge Alberto Achcar, 2008. "Financial constraints and investment decisions: evidence from a highly unstable emerging economy," Applied Economics, Taylor & Francis Journals, vol. 40(11), pages 1425-1434.
    • Handle: RePEc:taf:applec:v:40:y:2008:i:11:p:1425-1434
    DOI: 10.1080/00036840600771379
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    References listed on IDEAS

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    1. Dale W. Jorgenson, 1996. "Investment - Vol. 1: Capital Theory and Investment Behavior," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100568, April.
    2. Steven M. Fazzari & R. Glenn Hubbard & Bruce C. Petersen, 1996. "Financing Constraints and Corporate Investment: Response to Kaplan and Zingales," NBER Working Papers 5462, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Crisóstomo, Vicente Lima & López-Iturriaga, Félix Javier & Vallelado González, Eleuterio, 2014. "Nonfinancial companies as large shareholders alleviate financial constraints of Brazilian firm," Emerging Markets Review, Elsevier, vol. 18(C), pages 62-77.
    2. Bassetto, Camila F. & Kalatzis, Aquiles E.G., 2011. "Financial distress, financial constraint and investment decision: Evidence from Brazil," Economic Modelling, Elsevier, vol. 28(1), pages 264-271.
    3. Haddad, Eduardo & Mena-Chalco, Jesús & Sidone, Otávio, 2015. "Scholarly Collaboration in Regional Science in Developing Countries: The Case of the Brazilian REAL Network," TD NEREUS 4-2015, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    4. Črnigoj, Matjaž & Verbič, Miroslav, 2014. "Financial constraints and corporate investments during the current financial and economic crisis: The credit crunch and investment decisions of Slovenian firms," Economic Systems, Elsevier, vol. 38(4), pages 502-517.
    5. Eduardo A. Haddad & Jesús P. Mena-Chalco & Otávio J. G. Sidone, 2017. "Scholarly Collaboration in Regional Science in Developing Countries," International Regional Science Review, , vol. 40(5), pages 500-529, September.
    6. Bassetto, Camila F. & Kalatzis, Aquiles E.G., 2011. "Financial distress, financial constraint and investment decision: Evidence from Brazil," Economic Modelling, Elsevier, vol. 28(1-2), pages 264-271, January.

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