Trust and Firms' Growth: Evidence from Brazilian Corruption Reports
2014 CSS Fellowship
In collaboration with Francisco Muñoz.
Corruption has recently been at the center of the policy attention, as is shown by the recent anti-corruption movements in India and the passing of a new Brazilian anti-corruption law at the beginning of 2014. This project aims to better understand the economic and financial effects of corruption in the context of one of the world’s most promising emerging economies: Brazil. It looks at a natural experiment that generates variation in the level of banks’ and firms’ information, and exploits potential heterogeneity in the presumed amount and quality of information these agents possess. The focus of this project is on firms’ innovation activities and creation of new businesses, and in understanding whether a potential decline in lending causes financial distress.