Working papers
[9] Information Frictions and Firm Take up of Government Support: A Randomised Controlled Experiment, 2022
Abstract: This paper studies whether informational frictions prevent firms from accessing government support measures using an encouragement based randomized controlled trial. We focus on two COVID-19 relief programs for firms in Portugal. These programs provide (i) wage support for workers who are kept on payroll and (ii) lines of credit backed by government guarantees. We randomly assign firms to a treatment providing either simplified information regarding the program or a combination of information and step- by-step application support. We find a significant treatment effect of simple information provision to firms on take up for the wage support program, but not for lines of credit. Our results constitute direct evidence that information frictions can act as a meaningful barrier to comprehensive distribution of firm- level support measures.
link to ssrn: here
[8] Firm Responses to Violent Conflicts, with Bernardo Mendes and Diogo Mendes, 2021
Abstract: We estimate dynamic treatment effects of violent political conflicts on firm decisions to purchase inventory. We analyze monthly purchase data of 431 clients of a multinational beverage firm in Mozambique, as well as annual survey data. Firms respond to increases in conflict by decreasing purchases of inventory by up to 15%. This effect is significantly more pronounced for smaller firms. Firms exposed to violent conflicts also show greater intention to expand to less violent locations. The eruption of violent conflicts have significant short-term economic impact for small firms however, these do not persist beyond 2 months.
link to ssrn: here
The Finreg Blog (Global Financial Markets Center - Duke University School of Law) article: here
[7] How Does Climate Change Affect Firm Sales? Identifying Supply Effects, with Adrian Lam, Emilia Garcia-Appendini and Miguel Ferreira, 2021
Abstract: We estimate the economic impact of climate change by exploiting variation in local temperature across suppliers of the same client. We find that suppliers experiencing a 1°C increase in average daily temperature decrease their sales by 2%. The effect is more pronounced among suppliers in manufacturing and heat-sensitive industries, which is consistent with lower labor productivity and supply when temperatures are higher. Financially constrained suppliers are more affected due to their lack of financial flexibility to adapt to changes in temperatures. We also find that episodes of extremely hot and cold weather lead to large drops in sales.
link to ssrn: here
[6] Opiod Crisis and Real Estate Prices, with Dragana Cvijanovic and Moritz Wiedemann, 2021
Abstract: This paper estimates the impact of opioid abuse on real estate prices. We exploit the variation in opioid prescriptions induced by the staggered passage of state laws which intend to limit the usage of opioids. We document a long-term negative relationship between opioid prescriptions and residential real estate prices. For a one standard deviation change in prescriptions (41.10 prescriptions per 100 people) we find a 1.36 percentage points change in home values over the following 5 years. We also estimate a positive increase in home prices of 0.54, respectively 0.91, percentage points in the first, respectively second year, following the passage of these laws. While our results are consistent with opioid usage having significant long lasting negative economic effects, they highlight the positive impact of limiting opioid supply on the real economy.
link to ssrn: here
[5] The Impact of Financial Education of Executives on Financial Practices of Medium and Large Enterprises, with Daniel Metzger and Diogo Mendes. 2020
Abstract: This paper studies the impact of a course in finance for executives of medium and large enterprises on firm policies and performance through a randomized controlled trial (RCT) in Mozambique. Survey data and accounting data provide consistent evidence that managers change firm financial policies in response to finance education. Reductions in accounts receivable and inventories generate an increase in cash flows used to finance long-term investments. Those changes improve the performance of the treated firms. Overall, our results suggest that relatively small and low-cost interventions can help firms to mitigate financial constraints and potentially affect economic development.
link to ssrn: here
Presented at EFA 2019, AFA 2020 and the World Bank Empirical Management Conference
Experiment registration: here
VoxDev Article: here
[4] Financial Divisions in Diversified Firms, with Fernando Anjos, Joao Magro and Nuno Fernandes. 2018
This paper studies non-financial conglomerates that have a dedicated financial division, which we hypothesize improves the operation of internal capital markets. We develop a simple model based on this idea, which predicts that financial divisions are more valuable for larger firms, for firms with more diverse segments, and also for firms with more segments. Consistent with these predictions, we empirically find that it is conglomerates with the aforementioned characteristics that tend to possess a dedicated financial division. Moreover, we show empirical evidence that supports the notion that conglomerates with financial divisions run more efficient internal capital markets. Finally, we document that conglomerates with a financial division appear to command a value premium when compared to otherwise similar firms.
( email me for a draft)
[3] How do Firms React to Demand and Productivity Shocks? The Effects of Financial Strength on Price and Markup Responses, with Paulo Brito, Luis Costa and Carlos Santos. 2018
(email me for a draft)
[2] Why do Specialist Managers run Diversified firms?, with Ilona Babenko and Beatriz Mariano. 2018
( email me for a draft)
[1] Cash holdings and Business Conditions, with Clara Raposo and Miguel Ferreira. 2004
link to ssrn: here