CREDIT CONSTRAINTS: A COMPARATIVE ANALYSIS BETWEEN OPENED AND CLOSED CAPITAL BRAZILIAN COMPANIES

Background: Classic finance theories argue that information asymmetry is a major cause to reinforce the barrier between investors and companies. From this, it would be plausible to assume that publicly traded companies have less difficulty in raising equity, either from their own or from third parties, given their higher level of disclosure. Objective: the purpose of this study is to analyze the potential differences regarding credit constraints between opened and closed capital companies. To this end, financial information was collected from 291 Brazilian opened capital companies and 325 closed capital companies, from 2012 to 2016. Method: With a panel regression, with cash as the dependent variable and cash flow as the main explanatory variable. Results: the results show that opened capital companies are more dependent on cash and cash flow than closed capital companies. A sub-sample constructed using propensity score matching corroborated the study results. This implies a greater restriction to credit for opened capital companies than closed capital companies. Contributions: The main causes behind the unexpected results are the particularities of the Brazilian credit market (strong performance of BNDES), associated with the fact that opened capital companies were, on average, more affected by the 2015-2016 economic recession than the companies with closed capital.