Exploiting a set of tax reforms in Brazil, the author examines the impact of taxes levied at every stage of production on a firm's decision to integrate vertically, its investment, and its productivity.
Misallocations of factors of production have the potential to explain a large portion of cross-country differences in productivity (Hsieh and Klenow, 2009). Yet, empirical evidence relating actual differences in firms' productivity to observable policy distortions has been scarce.
This project studies the effect of productivity growth in agriculture through the adoption of a new technology, genetically modified soybean seeds, on industrial development in Brazil.
