Empirical evidence of trade credit uses of brazilian publicly-listed companies

This research provides empirical evidence on the use of trade credit as either a substitution or a complement to bank debt for listed companies in Brazil, controlling for the firms reputation, as stated by Alphonse, Ducret and Séverin (2006). The sample consists of 263 publicly-listed companies for 2006. Our findings support all three hypotheses. We provide evidence that trade credit may be used as a signal for the firm’s quality.

Effects of trade policy on technology adoption and investment

This paper studies the consequences of trade policy for the adoption of new technologies. It develops a dynamic international trade model with two sectors. Workers in manufacturing decide if new technologies are used, capital owners then choose investment. We analyze three different arrangements: free trade, tariffs, and quotas. In the model economy, free trade as well as tariffs guarantee that the most productive technology available will be used. In contrasL under a quota the most productive technology available will not be used at all times. Further, in the latter case investment and the capital stock are smaller than in the former one. Finally, there exists parameter values for which the computed difference in GDP is a factor of thirty.

Are the antiglobalizers right?: the issue of trade without a Walrasian auctioneer

This paper analyzes the determinants of expectational coordination on the perfect foresight equilibrium of an open economy in the class of one-dimensional models where the price is determined by price expectations. In this class of models, we relate autarky expectational stability conditions to regional integration ones, providing an intuitive open economy interpretation ofthe elasticities condition obtained by Guesnerie [11]. There, we show that the degree of structural heterogeneity trades-off the existence of standard efficiency gains -due to the increase in competition (spatial price stabilization)- and coordination upon the welfare enhancing free-trade equilibrium (stabilizing price expectations). This trade-off provides a new rationale for an exogenous price intervention at the international levei. Through the coordinational concern of the authority, trading countries are ab]e to fully reap the bene:fits from trade. We illustrate this point showing that classical measures evaluating ex-ante the desirability of economic integration (net welfare gains) do not always advise integration between two expectationally stable economies.

Terms of trade, macroeconomic dynamics and default decisions

A evidência empírica aponta que Termos de Troca é uma variável relevante tanto para dinâmica macroeconômica como para o risco de default em países emergentes. No entanto, a literatura de dívida soberana baseada nos trabalhos de Eaton e Gerzovitz (1981) e Arellano (2008) ainda não explorou de forma adequada as conecções entre a dinâmica de termos de troca e incentivos ao default. Nós contribuímos nessa área, introduzindo volatilidade de Termos de Troca no modelo proposto por Mendoza e Yue (2012), no qual as decisões de dívida soberana são vinculadas à um modelo de equilíbrio geral para a economia doméstica. Nós encontramos que uma economia exposta à volatilidade dos termos de troca consegue produzir uma variabilidade do consumo que supera significativamente a variabilidade do produto, característica que constitui um fato estilizado chave de business cycles de países emergentes. Nossos exercícios também mostram que decisões de default são geradas por mudanças bruscas nos termos de troca, mas não necessariamente estão vinculados à estados ruins da economia.

Citizens and the future of multilateralism in a polycentric world at 2030: the perspectives of emerging countries for the trading system: the impasse of WTO, the trends of mega agreements, the logic of value chains and the advent of consumers concerns on international trade

A new paradigm is modeling the World: evolutionary innovations in all fronts, new information technologies, huge mobility of capital, use of risky financial tools, globalization of production, new emerging powers and the impact of consumer concerns on governmental policies. These phenomena are shaping the World and forcing the advent of a new World Order in the Multilateral Monetary, Financial, and Trading System. The effects of this new paradigm are also transforming global governance. The political and economic orders established after the World War and centered on the multilateral model of UN, IMF, World Bank, and the GATT, leaded by the developed countries, are facing significant challenges. The rise of China and emerging countries shifted the old model to a polycentric World, where the governance of these organizations are threatened by emerging countries demanding a bigger participation in the role and decision boards of these international bodies. As a consequence, multilateralism is being confronted by polycentrism. Negotiations for a more representative voting process and the pressure for new rules to cope with the new demands are paralyzing important decisions. This scenario is affecting seriously not only the Monetary and Financial Systems but also the Multilateral Trading System. International trade is facing some significant challenges: a serious deadlock to conclude the last round of the multilateral negotiation at the WTO, the fragmentation of trade rules by the multiplication of preferential and mega agreements, the arrival of a new model of global production and trade leaded by global value chains that is threatening the old trade order, and the imposition of new sets of regulations by private bodies commanded by transnationals to support global value chains and non-governmental organizations to reflect the concerns of consumers in the North based on their precautionary attitude about sustainability of products made in the World. The lack of any multilateral order in this new regulation is creating a big cacophony of rules and developing a new regulatory war of the Global North against the Global South. The objective of this paper is to explore how these challenges are affecting the Tradinge System and how it can evolve to manage these new trends.

Trade liberalization and the evolution of skill earnings differentials in Brazil

Rio de Janeiro

Trade liberalization and the evolution of skill earnings differentials in Brazil

Rio de Janeiro

Essays on the general equilibrium effects of barriers to trade on economic growth, foreign trade and the location of economic activity in Brazil

This work presents a fully operational interstate CGE model implemented for the Brazilian economy that tries to quantify both the role of barriers to trade on economic growth and foreign trade performance and how the distribution of the economic activity may change as the country opens up to foreign trade. Among the distinctive features embedded in the model, modeling of external scale economies, port efficiency and land-maritime transport costs provides an innovative way of dealing explicitly with theoretical issues related to integrated regional systems. In order to illustrate the role played by the quality of infrastructure and geography on the country‟s foreign and interregional trade performance, a set of simulations is presented where barriers to trade are significantly reduced. The relative importance of trade policy, port efficiency and land-maritime transport costs for the country trade relations and regional growth is then detailed and quantified, considering both short run as well as long run scenarios. A final set of simulations shed some light on the effects of liberal trade policies on regional inequality, where the manufacturing sector in the state of São Paulo, taken as the core of industrial activity in the country, is subjected to different levels of external economies of scale. Short-run core-periphery effects are then traced out suggesting the prevalence of agglomeration forces over diversion forces could rather exacerbate regional inequality as import barriers are removed up to a certain level. Further removals can reverse this balance in favor of diversion forces, implying de-concentration of economic activity. In the long run, factor mobility allows a better characterization of the balance between agglomeration and diversion forces among regions. Regional dispersion effects are then clearly traced-out, suggesting horizontal liberal trade policies to benefit both the poorest regions in the country as well as the state of São Paulo. This long run dispersion pattern, on one hand seems to unravel the fragility of simple theoretical results from recent New Economic Geography models, once they get confronted with more complex spatially heterogeneous (real) systems. On the other hand, it seems to capture the literature‟s main insight: the possible role of horizontal liberal trade policies as diversion forces leading to a more homogeneous pattern of interregional economic growth.

Trade liberalization and the evolution of skill earnings differentials in Brazil

From 1988 to 1995, when trade liberalization was implemented in Brazil, relative earnings of skilled workers decreased. In this paper, we investigate the role of trade liberalization in explaining these relative earnings movements, by checking all the steps predicted by the HeckscherOhlin- style trade transmission mechanism. We find that: i) employment shifted from skilled to unskilled intensive sectors, and each Sector increased its relative share of skilled labor; ii) relative prices fell in skill intensive sectors; iii) tariff changes across sectors were not related to skill intensities, but the pass-through from tariffs to prices was stronger in skill intensive sectors; iv) the decline in skilled eamings differentials mandated by the price variation predicted by trade is very elose to the observed one. The results are compatible with trade liberalization, accounting for the observed rei ative eamings changes in Brazil.

EU-Mercosur trade relations: impacts of exchange rate misalignments on tariffs

The issue of “trade and exchange rate misalignments” is being discussed at the G20, IMF and WTO, following an initiative by Brazil. The main purpose of this paper is to apply the methodology developed by the authors to exam the impacts of misalignment on tariffs in order to analyse the impacts of misalignments on the trade relations between two customs unions – the EU and Mercosur, as well as to explain how tariff barriers are affected. It is divided into several sections: the first summarises the debate on exchange rates at the WTO; the second explains the methodology used to determine exchange rate misalignments; the third and fourth summarises the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of ‘misalignment tariffication’; the fifth reviews the effects of exchange rate misalignments on tariffs and its consequences for the trade negotiations between the two areas; and the last concludes and suggests a way to move the debate forward in the context of regional arrangements

5th BRICS Trade and Economic Research Network (TERN) meeting: the impact of mega agreements on BRICS

The BRICS TERN – BRICS Trade and Economics Research Network is a group of independent research institutes established four years ago by five think tanks from Brazil, Russia, India, China and South Africa. The main objective of the network is to study different aspects of trade and economic relations amongst these five countries. The purpose of the V BRICS TERN Meeting was to analyze and debate the effects of the negotiations of the Mega Agreements, mainly those initiated by the US and the EU, already in negotiation, to each of the BRICS Trade Policies. Both Mega Agreements were examined – the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The studies included the main impacts on trade flows and on the international trade rules system, respecting the perspective of each of the countries concerned. This workshop was an initiative of the Center for Global Trade and Investments (CGTI), a think-tank on International Trade held by FGV Sao Paulo School of Economics. Its main objective is the research on trade regulation, preferential trade agreements, trade and currency, trade and global value chains, through legal analysis and economic modelling. One of its main researches, now, is on the potential economic and legal impacts of the Mega Agreements on Brazil and WTO rules. This meeting was organized in March14, 2014, in Rio de Janeiro, in a perfect timing for introducing such issues in the international agenda, in advance of the 6th BRICS Summit scheduled to be held in Brazil in July 2014.

Trade liberalization and industrial concentration: evidence from Brazil

This paper applies an endogenous lobby formation model to explain the extent of trade protection granted to Brazilian manufacturing industries during the 1988- 1994 trade liberalization episode. Using a panel data set covering this period, we find that even in an environment in which a major regime shift has been introduced, more concentrated sectors have been able to obtain policy advantages, that lead to a reduction in international competition. The importance of industry structure appears to be substantial: In our baseline specification, an increase in concentration by 20% leads to an increase in protection by 5%-7%.

A brief history of Brazil's growth

The paper studies Brazil’s economic growth and begins with a brief overview of events that marked the country’s development from her discovery to the 19th century. It then divides the years between 1900 and 2008 into four periods. The breaks in regime occur in 1918, 1967 and 1980, according to the methodology created by Bai and Perron (1998, 2003). The use of the accounting methodology serves the analysis of the behavior of productivity in the previously identified different phases of the post-World War II period. High inflation might have been a reason for the decline in productivity observed between 1980 and mid-1990s. The paper shows that terms of trade have a significant effect on economic growth and output fluctuations. Other factors (such as fiscal stimulus or easy access to foreign finance) also matter for output accelerations in the short run. From 2004 to 2008, terms of trade improvement and debt reduction brought economic progress. The emergence of a new era in this millennium will depend on wiser fiscal policies than those of the past.

Trade in intermediate goods and total factor productivity

We develop and calibrate a model where differences in factor endowments lead countries to trade intermediate goods, and gains from trade reflect in total factor productivity. We perform several output and growth decompositions, to assess the impact that barriers to trade, as well as changes in terms of trade, have on measured TFP. We find that for very poor economies gains from trade are large, in some cases representing a doubling of GDP. Also, that an improvement in the terms of trade - by allowing the use of a better mix of intermediate inputs in the production process - translates into productivity growth.