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Mortgages for machinery: credit and industrial investment in pre-World War I Brazil
Published online by Cambridge University Press: 08 July 2014
Abstract
How could a primitive credit market finance the early industrialisation of an underdeveloped economy? To answer this question, we use a hand-collected data set of mortgage loans raised by industrial firms in the city of São Paulo during the period 1866-1914. These mortgages were debt obligations collateralised by land, improvements, machinery and equipment. We argue that the mortgage credit market was a key source of funding for early industrial investments in Brazil. We find that industries were mainly funded by non-banking and domestic agents. The empirical evidence suggests that mortgages were an important proxy for industrial investment.
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- Copyright © European Association for Banking and Financial History e.V. 2014
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