My Academic Research

Below, you can find some of my published/work-in-progress academic work:

M&A under financing frictions: evidence from credit supply shortfalls

Joint work with Luis Ricardo Kabbach de Castro (University of Navarra)

  • Status: Working Paper. Draft version can be obtained here.

  • Presentations: European Financial Management Association (EFMA 2022 - Rome, Italy); 2022 AOM Conference (2022, Seatle, United States), 7th ICGS Annual Conference (2021, Groningen, NL, Remote); 47th EIBA Annual Conference (2021, Madrid, ES), XXI Brazilian Finance (2021, São Paulo, Brazil)

Abstract: despite empirical evidence showing that firms’ investments decrease during periods of credit supply shortfalls, little is known about how firms can eventually circumvent the adverse effects of negative credit supply shocks. In this paper, we show that firms can relieve financing frictions during banking crisis periods by selling equity stakes to outside investors, and the specific channel that relieves such frictions is a shift from domestic to cross-border issuance in countries with historically higher issuance volume. To do so, we examine Mergers and Acquisitions (M&A) transactions worldwide between 1990-2019 and the outcomes of targeted firms the deal by exploring cross-sectional variation in the supply of credit induced by banking crises. The results show that firms that have higher levels of expiring debt maturities in the year of the credit shock are more likely to become targets in M&A deals. Moreover, we find strong evidence that target firms invest more and issue more debt after the deal relative to their counterparts. Finally, we show that these firms are shifting from issuing debt in their own countries to issuing debt in countries with historically higher issuance volume. All in all, these results show that M&As can work as leeway to relieve financing frictions in periods when credit supply frictions are more prevalent.

Cross-border and domestic minority acquisitions and financial constraints: Reaping big benefits from small shareholders

Joint work with Luis Ricardo Kabbach de Castro (University of Navarra), Dirk Boehe (Un. of Massey) and Aquiles Kalatzis (University of Sao Paulo)

  • Status: Published at the Corporate Governance: an International Review - Click here to access.

  • Presentations: XVIII Brazilian Finance (2018) Meeting.

Abstract: using a panel of approximately 12,000 domestic and cross-border deals, our results show a positive and statistically significant relationship between the target firms’ financial constraints and the occurrence of minority acquisitions. Moreover, compared to a matched sample, there is a statistically significant difference between the growth in investment and leverage of target firms after deal completion, indicating the effectiveness of minority acquisitions in alleviating target’s financial constraints. At the institutional level, we find that the level of financial development and legal protection in a country are also positively related to minority acquisitions.

When Streets Have No Men: Urban Traffic Restrictions and Air Pollution

Joint work with Andre Mancha (Insper) and Naercio Aquino Menezes-Filho (Insper)

  • Status: Published at Revista Brasileira de Economia. Click here to access.

Abstract: we analyze two quasi-experiments to assess how urban traffic restrictions and social distancing norms affect pollution. First, using hourly air pollution levels from thirty-three monitoring stations in different municipalities of the State of São Paulo, we exploit exogenous variation in quarantine rules across cities following the COVID-19 outbreak to estimate how social distancing affected pollution levels. We find an average decrease of 22.4% in air pollution after the capital’s quarantine announcement, with heterogeneous effects across pollutants. We also compare this effect with another quasi-experiment of exogenous suspensions in traffic restrictions between 2000-2018 in the same State. We find increases of 16.7% in air pollution when more cars are allowed on the streets. We use our estimates to show that a reduction of 4.7 times the estimated effect in the quarantine period is necessary to reach the capital’s long-term air quality goals. To the best of our knowledge, our paper is the first that shows the causal impact of quarantine regulation induced by the COVID-19 pandemic and its implications on air pollution levels in the most prominent Brazilian State, using hourly pollution data across cities with different social distancing laws.

Other Work-in-Progress

  1. On the Study of Debt Structure Determinants – draft can be obtained upon request.
  2. The Real Effects of Capital Requirements on the Brazilian Healthcare Industry – draft can be obtained upon request.