Business Management Dynamics

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ISSN: 2047-7031

bmd Business and Management Dynamics bmd
ISSN: 2047-7031  
Volume  3   Issue 3  2013  
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Article Abstract
Determinants of Energy Investments in Brazil: An empyrical analysis of the period 1996-2011
Keywords:  econometric models, private investment, energy, simulation models
Hugo Ferreira Braga Tadeu and Jersone Tasso Moreira Silva
Empirical studies regarding the determinants of energy investments in developing countries, including Brazil, have demonstrated the negative impact of high inflation rates. However, the recent Brazilian experience clearly shows that stabilization, in and of itself, is not capable of recovering the investment rates. With this in mind, this study's goal is to answer, with the help of econometric simulation models, the questions: (i) what are the key-drivers to assess the Brazilian economy?; and (ii) what are the key-factors to be considered when investments are made, particularly in energy? To answer the first question we evaluated the impacts of macro-economic variables on private investments, using a strategic bias and a long term vision plan. The estimates demonstrate empirical crowding-in evidence of public investments in infrastructure over private investments a s a real impact to energy. As for public investments (non-infrastructural) we suggest that the crowding-in impact dislocates private investments. All these indicators were obtained as presented in the theory, with the exception of the real interest rates variable (r), in which we observed that the coefficient is positive and insignificant in the estimated equation.
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