This article presents evidence on the positive effect of international trade on productivity growth using industrial level data preceding and following Brazil's trade liberalization in 1988-90. Our data reveal large and widespread productivity improvement across industries after barriers to trade were drastically reduced. Econometric results confirm the association between trade liberalization and productivity growth and show that the impact was indeed substantial: The observed tariff reduction in the period brought a 6% estimated increase in total factor productivity growth rate and a similar impact on labor productivity.
This paper analyzes whether the behavior related to the equity market timing affected the recent IPO wave of Brazilian firms and exerted an impact on companies'capital structure. Using data from january 2004 to december 2007 the paper classifies the months in the sample in hot or cold according the number of IPOs that took place in each month. The paper confirms an oportunistic behavior by the firms that issue a higher volume of stocks in periods classified as hot. The paper also shows that the impact of this behavior on companies` capital structure is very limited. Although there is a reduction in companies` leverage right after the IPO, this returns to its previous level only a few quarters after the IPO. (Full article available in Portuguese only)
ResumoEste trabalho analisa o relacionamento entre a política financeira das empresas e o regime cambial para uma amostra de empresas brasileiras não-financeiras no período de 1996 a 2006. Os resultados indicam que, além de reduzir a proporção da dívida expressa em moeda estrangeira e aumentar a utilização de derivativos, a adoção de um regime de câmbio flutuante leva a um maior casamento monetário entre a ativo e o passivo das firmas. O trabalho mostra que esta melhora no gerenciamento de risco das firmas dá-se, principalmente, nas firmas mais expostas ao risco cambial. Os resultados confirmam que o regime cambial exerce um papel importante na determinação da vulnerabilidade externa das firmas. Palavras-Chave: Dívida, Regime cambial, Exposição, Proteção, Derivativos. AbstractThis paper analyzes the relationship between companies' financial policies and the exchange rate regime for a sample of non-financial Brazilian companies from 1996 to 2006. The results indicate that besides reducing the proportion of companies debt denominated in foreign currency and increasing the use of currency derivatives, the adoption of a floating exchange rate regime is shown to improve the match between the currency composition of companies' assets and liabilities. The paper also shows that this reduction in companies' currency mismatches is more pronounced for companies in the highest quantile of foreign exposure; therefore the results confirm that the exchange rate regime plays an important role in the determination of companies' foreign vulnerability. JEL classification: F31; F41; G15; G32.Keywords: Debt composition, Hedging, Use of derivatives, Exposure, Exchange rate regime. Área: Macroeconomia, Economia Monetária e Finanças. Address: Rua Quatá 300, Vila Olímpia, São Paulo-SP, Brazil. Tel.: + 55 11 4504 2437; Fax: +55 11 4504 2350. E-mail address: joselrj1@isp.edu.br IntroductionAdverse external shocks represent a key source of risk for emerging markets. In these countries, several episodes of crises and economic downturns were triggered by external factors.1 One question levied by the literature is whether the exchange rate regime plays a role in reducing countries' vulnerability to these shocks.Following a sequence of financial crises in the 1990s, a new generation of currency crises models placed corporate behavior at the center of the debate about the relationship between countries' external vulnerability and the exchange rate regime. In these models, a fixed exchange rate regime would increase countries' vulnerability by leading companies to disregard the exchange rate risk, biasing their borrowing towards foreign currency denominated debt and/or reducing their hedging activities.2 In opposition, a floating exchange rate regime would help countries to mitigate their external vulnerability by inducing companies to take seriously their exchange rate exposure.
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