Fostering Innovation Activities with the Support of a Development Bank: Evidence from Brazil
33 Pages Posted: 21 Sep 2020
Date Written: September 18, 2020
I evaluate the impact of the Banco Nacional de Desenvolvimento Econômico e Social, (BNDES) disbursements on companies’ R&D intensity of companies operating in the Brazilian manufacturing sector for the period of2003-2011. Using Instrumental Variable (IV) technique, I find a crowding-in impact of receiving funding from BNDES on business-funded innovation intensity, resulting in an increased commitment in innovation activities for funded Brazilian manufacturing companies. The findings of this analysis provide new evidence regarding the industrial sector activity of the Brazilian development bank, adding on the debate about additionality/substitutability of public financial resources.
Keywords: BNDES, development bank, crowding-in/out, R&D intensity
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