Surety Bond in Infrastructure in Brazil: Transaction Costs and Agency Theory Perspectives

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Tulio Henrique Moreira Marques orcid
Mario Henrique Ogasavara orcid
Frederico Araujo Turolla orcid


Context: infrastructure projects assume the use of intensive capital and the participation of several actors, where the institutional environment influences their respective contractual arrangements. A financial instrument for project governance is surety bond (SB), whose purpose is to ensure compliance with the contracted object. However, research involving SB in the context of emerging countries such as Brazil is still incipient. Objective: this study aims to understand the use of SB in Brazil and proposes a conceptual model for analyzing transactions. It contributes to the literature by investigating the relationship between the actors and transactions involved in SB using the transaction costs theory and agency theory perspectives. Methods: this study adopts a qualitative methodology using primary data collected with 10 in-depth semi-structured interviews with market professionals with substantial experience in SB. In addition, it uses secondary data based on debate and a specific lecture on the topic involving the reality and the use of SB. Results: the findings indicate that the agency problem and the high transaction costs in Brazil prevent the development of this risk coverage market, giving rise to targeted public policies. Conclusion: the proposed conceptual model reflects the various specific transactions in the use of SB, the underlying phenomena and the validation of propositions related to market failures, and the institutional environment’s influence.


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Marques, T. H. M., Ogasavara, M. H., & Turolla, F. A. (2021). Surety Bond in Infrastructure in Brazil: Transaction Costs and Agency Theory Perspectives. Journal of Contemporary Administration, 26(3), e200401.
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