Capital Structure in Brazil: Review of Studies During the Period of 1988-2003

Matsuo, Alexandre Kazuma; Eid Jr., William

doi:10.2139/ssrn.1435347

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Capital Structure in Brazil: Review of Studies During the Period of 1988-2003

22 Pages Posted: 19 Jul 2009

See all articles by Alexandre Kazuma Matsuo

William Eid Jr.

Getulio Vargas Foundation (FGV)

Date Written: July 17, 2009

Abstract

A systematic review was made of studies regarding the capital structure in Brazil during the period of 1988-2003. The recurring themes relate to the static tradeoff and pecking order in various moments of the economy, the fiscal benefits of indebtedness and interest on privately-owned capital, and the inefficacies of the stock market. The Brazilian companies enjoy little leverage as compared to other emerging markets. BNDES is responsible for 5% of the gross formation of fixed capital. The funding of resources occurs at opportune moments, and the financing decision may precede that of investment. Efficacy of the judiciary system and company transparency positively affect access to credit.

Keywords: Brazil, Capital Structure

JEL Classification: G00

Suggested Citation: Suggested Citation

Matsuo, Alexandre Kazuma and Eid Jr., William, Capital Structure in Brazil: Review of Studies During the Period of 1988-2003 (July 17, 2009). Available at SSRN: https://ssrn.com/abstract=1435347 or http://dx.doi.org/10.2139/ssrn.1435347