BNDES’ Impact on the Steel Industry’s Efficiency: A Two-Stage Malmquist Model Usage

Abstract

Using a two-stage Malmquist Data Envelopment Analysis, this chapter aims to evaluate how the Brazilian National Development Bank impacts the steel industry performance. To do so, a Malmquist Index decomposition and nonlinear robust regression is carried out to test the impact from the contextual variables considered. The research hypothesis of a positive impact on the steel industry performance cannot be supported by the model results, which suggest a negative coefficient on the catching-up effect. A few examples of quantitative research on this theme can be found, but most have a theoretical and qualitative focus. This chapter contributes to this field of research by using a settled methodology to identify and measure the efficiency performance of the firms. However, due to some limitations from the sample selected and the methodology applied, there is a need for further research, mainly to assess the social outcomes derived from this kind of public policy.