A Note on the Effect of Decomposing Credit for Explaining Brazilian Cross-State GDP Growth

Matos, Paulo Rogério Faustino; Santos, Davi Albuquerque Vieira dos

doi:10.5935/0034-7140.20200009

Cited by 4 publications

(7 citation statements)

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“…Corroborating our findings in some sense, they find that both household and enterprise credit to GDP enter consistently with a positive coefficient, while Silva et al (2021) find that nonearmarked credit to the corporate sector is associated with municipal economic growth more strongly than earmarked credit. Unlike our results, Matos and dos Santos (2020) find no relationship between years of schooling and growth. Still on the impact of human capital, our finding on the relevance of this growth driver for cities in the Northeast from 2009 to 2015 corroborates the evidence reported in Nogueira and Arraes (2018).…”

Section: Resultscontrasting

confidence: 99%

“…Due to the unprecedented nature of this study, it is difficult, but will try to make a parallel with some previous results. Comparing with Matos and dos Santos (2020), Brazilian states seem to converge at a faster rate than cities in the Northeast. Corroborating our findings in some sense, they find that both household and enterprise credit to GDP enter consistently with a positive coefficient, while Silva et al (2021) find that nonearmarked credit to the corporate sector is associated with municipal economic growth more strongly than earmarked credit.…”

Section: Resultsmentioning

confidence: 93%

“…Regarding the role of credit market, Galeano and Feij o (2012) have identified a statistically significant and positive correlation between total credit volume and GDP growth. More recently, Matos and dos Santos (2020) add to this empirical literature by using a dynamic balanced panel from 2003 to 2017. They find that Brazilian cross-state growth depends more on the evolution of household credit than on credit to firms, however they also find a negative role played by government credit to GDP given by the significant elasticity of À0.87.…”

Section: Literature Review On Growth Applied To Brazilmentioning

confidence: 99%

“…Restricting to some of the most recent contributions applied to different countries, Cai et al (2002) analyze empirically determinants of economic growth in Chinese provinces during the period 1978-1998, while Papyrakis and Gerlagh (2007) analyze empirically determinants of economic growth in the USA using cross-sectional data on 49 states over the period 1986-2001. Ledyaeva and Linden (2008) have proposed a modification of Barro and Sala-i-Martin (1997) growth model aiming to examine the drivers of GDP per capita growth in 74 Russian regions during period of 1996. Matos and dos Santos (2020 add to this empirical literature by using a dynamic balanced panel from 2003 to 2017 to study GDP growth of 27 states in Brazil.…”

Section: Introductionmentioning

confidence: 99%

“…Ledyaeva and Linden (2008) have proposed a modification of Barro and Sala-i-Martin (1997) growth model aiming to examine the drivers of GDP per capita growth in 74 Russian regions during period of 1996–2005. Matos and dos Santos (2020) add to this empirical literature by using a dynamic balanced panel from 2003 to 2017 to study GDP growth of 27 states in Brazil. Comparing cross-country and cross-state exercises, Barro and Sala-i-Martin (1992) find much more income convergence between states than between countries.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

On the cross-city growth drivers of the most vulnerable region of Brazil

Matos

Bastos

Martins

et al. 2023

JFEP

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Purpose The purpose of this paper is discussing on cross-city empirical economic growth, by estimating an unbalanced dynamic panel for the most vulnerable region of Brazil. Design/methodology/approach The authors propose including additional and specific sources of cross-city variation, enabling them to capture the essence and reality of this region. The sample selection is given by the solution of a trade-off on the number of cities and the available explanatory variables. Considering the final choice, the analysis is based on 6,452 observations extracted from a sample of 925 cities between 2009 and 2015. Reconciling the regional growth literature and this availability of observable data, the authors decide to explain cross-city real gross domestic product per capita in log, controlling for its lagged value besides 15 explanatory variables on human capital, financial system, business environment and social infrastructure. Findings This study uses growth drivers on human capital, financial system, business environment and social infrastructure. Considering 6,452 observations for the period from 2009 to 2015, this study finds a significant role played by the levels of education of formal workers, rural financing, real estate financing and FIRJAN indices (health and employment). Research limitations/implications A more comprehensive and complete understanding of cross-city variation, whether in the Northeast, in the North of the country or in other regions, involves the expansion of growth drivers in the model. Certainly, the impact of the industrial sector (not captured by the FIRJAN employment/income index), or programs and initiatives geared to technology, must be significant and positive. Despite the low market share, the insertion of microcredit data for informal, small business owners and more underserved families, can bring insights not measured in this article. Practical implications On financial system and development: The results on the significant and positive coefficient of rural and real estate financing are fundamental in conducting public policies aimed at granting credit. On human capital: The expected and intuitive relevant role of education suggests that good policies that are implementable need to be looked for and replicated to other northeastern cities. The state of Ceará seems to be that benchmark to be followed by the other states. Social implications Another public policy that needs to be strengthened so that the most vulnerable cities can grow is related to the partnership with the private sector in the expansion and maintenance of basic sanitation. In this context, the new Legal Framework for Basic Sanitation is an important step. Its main objective is to universalize and qualify the provision of services in the sector. Theoretically, it seems to be an important advance and this also unlocks the first big wave of investments. Originality/value The analysis aims to contribute to the recent studies on regional growth applied to Brazil. To the best of the authors’ knowledge, this is an innovative contribution, and the main differences between this paper and the others are the sample of cities, the period, the growth model and the estimation technique. For instance, Da Mata et al. (2005, 2007) explore population growth and its implications for economic dynamics and income generation among 123 urban agglomerations between 1970 and 2000. Alves (2021) studied slum growth in contemporary urbanization of households in 272 Brazilian cities from 1991 to 2010.

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Section: Resultscontrasting

confidence: 99%

Section: Resultsmentioning

confidence: 93%

Section: Literature Review On Growth Applied To Brazilmentioning

confidence: 99%