Following Almeida, Campello and Weisbach (2003), we use the link between financial constraints and firm’s demand for liquidity to test the effect of financial constraints on firm policies in Brazil. The effect of financial constraints can be captured by a firm’s propensity to save cash out...

The impact of international trade on wages has received substantial attention in recent decades; but only recently the specific effects of exporting on wage inequality have been investigated in detail. This paper employs the unexpected 1999 Brazilian exchange rate devaluation to identify the...

The literature concerning the effect of tariffs on the inter-industry wage premium has not addressed the role of total factor productivity (TFP) in determining both the wage premium and tariffs. This omission not only overlooks an important determinant of wage premium but also invalidates the...

A major obstacle in the estimation of inter-industry (vertical) productivity spillovers is the need of an exogenous productivity shock. In this article, I propose the use of trade policy changes as a large productivity shock, since the literature has found evidence that trade liberalisations...

The elasticity of intertemporal substitution (EIS) is one of the key parameters in the Economics and Finance literature. It is usually estimated by means of the consumer’s Euler Equation using an instrumental variable approach, and the estimates are usually zero or close to zero. Nevertheless,...

Following trade liberalization, several developing countries experienced a sharp increase in the share of informal manufacturing employment. In this paper, I examine the impacts of trade liberalization on the labor markets of a small open economy, in an environment in which tariffs affect firms'...

The debate over the use of tariffs or value added taxes in developing countries has focused on the difficulty of collecting VAT from the informal sector of the economy. This paper contributes by considering this issue with heterogeneous firms and endogenous entry. This yields two new results....