Brazil's trade liberalization between 1990 and 1993, and its partial reversal in 1995, are used to study how reduced … inward trade barriers affect productivity. The production function of Brazilian manufacturers is estimated at the ISIC3 two …-digit level under various alternatives, including an extension of Olley and Pakes' (1996) procedure. Firm-level productivity is …

productivity change. The model implies that (i) the so-far untreated effect stems from firms' planned efficiency responses to the … competitive environment and that (ii) a suit-able proxy to productivity is investment interacted with a sector-level competition …-effects estimation and remedying commonly suspected biases. Whereas productivity change is measured consistently, scale economies are not …

Historical data for over hundred years and 14 countries is used to estimate the long-run effect of productivity on the … real exchange rate. We find large variations in the productivity effect across four distinct monetary regimes in the sample … argue that changes in trade costs over time may affect the impact of productivity on the real exchange rate over time. We …