Title: Evaluating inter-sectorial efficiency of state-owned bank financing: a hierarchical game with a two-stage Malmquist approach

Authors: Ricardo Kalil Moraes; Peter Fernandes Wanke; João Ricardo Faria; Steven B. Caudill; Yong Tan

Addresses: Brazilian Ministry of Economy, Esplanada dos Ministérios, Bloco F, Edifício Anexo, Ala A, Térreo, CEP 70059-900, Brasília-DF, Brazil ' Centre for Studies in Logistics, Infrastructure and Management, COPPEAD Graduate Business School, Federal University of Rio de Janeiro, Rua Pascoal Lemme, 355 – Cidade Universitária, 21941-918, Rio de Janeiro, RJ, Brazil ' Department of Economics, College of Business, Florida Atlantic University 777 Glades Road, Boca Raton, FL 33431, USA ' Department of Economics, College of Business, Florida Atlantic University. 777 Glades Road, Boca Raton, FL 33431, USA ' School of Management, University of Bradford, Bradford, West Yorkshire, BD7 1DP, UK

Abstract: This paper examines the efficiency of the Brazilian productive structure due to public funding provided by its state-owned bank. We develop a hierarchical dynamic game between this bank and the firms yielding investment as a function of the subsidised credit, industry competition, and openness. Through a multi-sector two-stage data envelopment analysis model, we find that the funding's main recipients were not effective in jointly producing aggregate outcomes. Finally, the importance of the degree of economic openness and the level of competition in the sectors indicate that consideration of these factors is essential to any comprehensive industrial policy.

Keywords: two-stage data envelopment analysis model; efficiency analysis; economic openness; competition; industrial policy.

DOI: 10.1504/IJPP.2023.133600

International Journal of Public Policy, 2023 Vol.17 No.1/2, pp.1 - 30

Received: 26 Jul 2021
Received in revised form: 24 May 2022
Accepted: 12 Jul 2022
Published online: 25 Sep 2023 *

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