Determinants of Debt and Economic Regulation: An Analysis of Brazilian Regulated Infrastructure Firms

23 Pages Posted: 17 Aug 2017

See all articles by Francisco Anuatti-Neto

Francisco Anuatti-Neto

University of São Paulo (USP) - Faculty of Economics, Administration and Accounting of Ribeirão Preto (FEARP)

Marcelo Bianconi

Tufts University - Department of Economics

Dario Guerrero

University of Sao Paulo (USP), Faculty of Economics, Administration and Accounting (FEA), Students

Joe Akira Yoshino

University of São Paulo (USP) - Department of Economics

Date Written: August 14, 2017

Abstract

This paper examines whether or not firms in regulated sectors present different indebtedness levels in comparison to firms in unregulated sectors, that is, whether or not an economically regulated environment impacts a firm’s indebtedness level. We present an analysis of panel data for a sample of Brazilian regulated and unregulated firms. After controlling for the variables recommended by the empirical literature addressing capital structure, our evidence shows that regulated firms engage in more indebtedness relative to unregulated ones, most prominently in the long-term, with some short-term exceptions idiosyncratic to the Brazilian experience. Profitability is a robust attribute of Brazilian firm indebtedness with a negative and significant impact both in the short- and long-term, and the regulated long-term real interest rate has a significant negative impact on long-term firm indebtedness.

Keywords: Capital Structure; Debt; Leverage; Economics of Regulation; Infrastructure

JEL Classification: G32; G38; L51

Suggested Citation

Anuatti-Neto, Francisco and Bianconi, Marcelo and Guerrero, Dario and Yoshino, Joe Akira, Determinants of Debt and Economic Regulation: An Analysis of Brazilian Regulated Infrastructure Firms (August 14, 2017). Available at SSRN: https://ssrn.com/abstract=3018955 or http://dx.doi.org/10.2139/ssrn.3018955

Francisco Anuatti-Neto

University of São Paulo (USP) - Faculty of Economics, Administration and Accounting of Ribeirão Preto (FEARP) ( email )

Av. Bandeirantes 3900 - Monte Alegre
Ribeião Preto, São Paulo 14040-900
Brazil
551633153882 (Phone)
551633153010 (Fax)

HOME PAGE: http://usp.br

Marcelo Bianconi

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States
617-627-2677 (Phone)

HOME PAGE: http://www.tufts.edu/~mbiancon

Dario Guerrero (Contact Author)

University of Sao Paulo (USP), Faculty of Economics, Administration and Accounting (FEA), Students ( email )

Av. Prof. Luciano Gualberto 908
Sao Paulo
Brazil

Joe Akira Yoshino

University of São Paulo (USP) - Department of Economics ( email )

Av. Prof. Luciano Gualberto 908
Sao Paulo SP, 05508-900
Brazil

HOME PAGE: http://www.usp.br/feaecon/perfil.php?i=10&u=57

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