Investment decisions and capital accumulation: firm-level evidence from Brazil

• Main Author: Camêlo, Felipe Diogo
• Other Authors: Santos, Cézar Augusto Ramos
• Language: English
• Published: 2018
• Subjects: Investment decisions; Lumpy investment; Capital stock; Capital growth; Crescimento de capital; Decisões de invesmento; Investimentos; Investimentos de capital; Capital social; Capital (Economia)
• Online Access: http://hdl.handle.net/10438/24314

Submitted by Felipe Diogo Camêlo ([e-mail]) on 2018-07-05T15:41:51Z No. of bitstreams: 1 Tese_FelipeDiogoCamelo.pdf: 649864 bytes, checksum: 09e2d4e77981e76ab7aa60bb997240aa (MD5) === Approved for entry into archive by GILSON ROCHA MIRANDA ([e-mail]) on 2018-07-06T13:46:37Z (GMT) No. of bitstreams: 1 Tese_FelipeDiogoCamelo.pdf: 649864 bytes, checksum: 09e2d4e77981e76ab7aa60bb997240aa (MD5) === Made available in DSpace on 2018-07-16T20:13:16Z (GMT). No. of bitstreams: 1 Tese_FelipeDiogoCamelo.pdf: 649864 bytes, checksum: 09e2d4e77981e76ab7aa60bb997240aa (MD5) Previous issue date: 2018-04-27 === Using firm-level data from an administrative Brazilian dataset, I document a few stylized facts regarding capital stock accumulation patterns and investment decisions. Finding evidence largely in favor of micro-level lumpiness of investment as it was found for American firms, I document that there are a few particularities in the behavior of Brazilian firms. First, I document that the distribution of the growth rate of capital is more dispersed, with “fatter” tails. Second, I also show that, as economic activity, the volume of investment and capital stock are more concentrated on a small number of firms, micro-level lumpiness might have a bigger role in understanding aggregate movements. Third, I show that the observable characteristics of Brazilian firms explain a lot more of sudden movements in capital growth when compared to the U.S., after controlling for industry specific characteristics and other variables. Fourth and last, I compute statistical measures related to the investment rate distribution, which show that investment at the firm-level seems to be even “lumpier” in Brazil, with firms investing less on average, while experiencing more episodes of investment spikes and periods of inaction.