Friday, March 26, 2021 at 3:10pm to 4:30pmVirtual Event
Please join us for an Economics Department Seminar Series event on Friday, March 26th from 3:10-4:30 PM EST.
Dr. Claudio Ferraz of the University of British Columbia will present his paper:
“Procuring Firm Growth: The Effects of Government Purchases on Firm Dynamics”
(brief discussion and Q&A to follow).
Dr. Ferraz is Professor of Economics at the University of British Columbia and a part-time professor at the Department of Economics of PUC-Rio in Brazil. He's an Associate Editor of Econometrica, Journal of Political Economy, and Journal of Development Economics. His research focuses on economic development, political economy, and public economics, in particular governance and accountability in developing countries and consequences for politics and public service delivery. Here please find links to his CV and website. This is the link for the paper he will present.
Firms in the developing world exhibit much flatter life-cycle dynamics compared to firms in developed countries. This paper examines the role of demand constraints in limiting the growth of small and medium firms in Brazil. We test whether firms that win government procurement contracts grow more compared to firms that compete for these contracts but do not win. We assemble a comprehensive data set combining matched employer-employee data for the universe of formal firms in Brazil with the universe of federal government procurement contracts. Exploiting a quasi-experimental design, we find that winning at least one contract in a given quarter increases firm growth by 2.2 percentage points over that quarter, with 93% of the new hires coming from either unemployment or the informal sector. These effects also persist well beyond the length of the contracts. Part of this persistence comes from firms participating and winning more future auctions, as well as penetrating other markets.
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