Capital structure: the role of the funding sources on which Brazilian listed companies are based

Abstract

This study evaluated the capital structure of Brazilian listed companies, within the period from 2005 to 2012, verifying the role of the funding sources on which such companies are based. To do this, the debt ratio in 3 different sources was evaluated: financial institutions, capital market, and sources with subsidized interest rates, the latter representing an institutional factor of the Brazilian economy. A sample of 95 companies was used, out of the 150 largest companies listed on the São Paulo Securities, Commodities, and Futures Exchange (BM&FBOVESPA). By using models with panel data, the results show that the funding sources impact on the companies' capital structure formation, influencing both in leverage and in debts maturity. Regarding leverage, companies that have a higher proportion of their funds raised in the capital market are more leveraged. The same is not true for companies that have a higher proportion of subsidized resources. Regarding debts maturity, resources of different maturities are obtained from different sources: the resources of lower maturities are obtained from financial institutions and the resources of higher maturities are obtained from the capital market and sources with subsidized interest rates - i.e. the Brazilian National Bank for Economic and Social Development (BNDES). Comparing the resources from the capital market to subsidized resources, it is concluded that the former have higher maturity. Such a result may be explained by the growth of the Brazilian capital market in recent years, since 2009, so that companies have been based on the capital market for their funding with higher maturity and on subsidized resources, from BNDES, for their funding with intermediate maturities.