Número: 171
Autor(es): Ricardo Duque Gabriel
Mês: Janeiro
Ano: 2022

Public procurement accounts for one third of government spending. In this paper, the author documents a new mechanism through which government procurement promotes firm growth: firms use procurement contracts to increase the amount of cash-flow based lending.
The paper uses Portuguese administrative data over 2009-2019 and exploit public contests as a source of quasi-exogenous variation in the award of procurement contracts. Winning an additional €1 from a procurement contract increases firm credit by €0.05 at lower interest rates. This finding highlights a mechanism through which future fiscal stimulus can impact the real economy today: procurement contracts increase firms’ net worth by increasing future cash-flows that can be used as collateral to ease borrowing constraints and boost corporate liquidity.
Consequently, this enhanced access to credit promotes higher investment and employment with these effects being more pronounced and persistent in smaller and financially constrained firms. At the aggregate level, the author empirically estimates that an additional €1 in public procurement increases regional output by €1.8 with the credit channel accounting for 10% of it.

 

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Número: 170
Autor(es): Diana Bonfim | Cláudia Custódio | Clara Raposo
Mês: Setembro
Ano: 2022

We use variation in the access to a government credit certification program to estimate the financial and real effects of supporting small firms. This program has been implemented during the global financial crisis, but has remained active ever since, allowing us to analyze its effects both during recessions and recoveries. Eligible firms have access to government loan guarantees and a credit quality certification. We estimate real effects using a multidimensional regression discontinuity design. We find that eligible firms borrow more and at lower rates than non-eligible firms, allowing them to increase investment and employment during crises. Industry-level analysis shows reduced productivity heterogeneity in more exposed industries, which is consistent with improved credit allocation. However, when the economy is recovering the effects of the program are less pronounced and centered on the certification component.

 

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Número: 169
Autor(es): João Capella-Ramos | Romina Guri
Mês: Setembro
Ano: 2022

The COVID-19 crisis has severely impacted firms across the world, with some showing greater resilience than others. Engaging in international markets, in particular, increases firms’ exposure to such a global adverse shock, while also providing firms with opportunities for resilience-enhancing responses to the crisis. Operating in a small open economy, Portuguese firms were particularly vulnerable to disruptions in international trade and global value chains. In this paper we investigate how Portuguese exporting firms have adapted their business activities on the back of the COVID-19 crisis, and whether these adaptations depended on their intrinsic characteristics, notably firm size. Furthermore, we analyse the role of government support measures taken in response to the COVID-19 crisis in the adaptation processes of both exporting and domestic firms. We use the recently available Fast and Exceptional Enterprise Survey – COVID-19 (‘Inquérito Rápido e Excecional às Empresas’, COVID-IREE) and complement it with balance sheet data from the Integrated Corporate Accounts System (‘Sistema de Contas Integradas das Empresas’, SCIE), covering a sample of approximately 7,000 Portuguese firms. The results suggest that exporting firms were more likely to adapt their business activities in the face of the COVID-19 crisis. We also found evidence that the adaptation processes of exporting firms tended to be multi-dimensional, operating through different adaptation mechanisms, and contingent upon firm size. The results also suggest that government support measures have enhanced the likelihood of both exporting and domestic firms to adapt, providing evidence of their effectiveness and highlighting the importance of firm-oriented policies that promote economic resilience.

 

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Número: 168
Autor(es): Natália Barbosa
Mês: Setembro
Ano: 2022

This paper assesses the causal relationship between outward foreign direct investment (FDI) and various sides of firm performance, using micro data from Portuguese manufacturing firms during 2006-2012 and 2017-2020. Our analysis shows that the learning effects for Portuguese parent firms depend on the underlying outward FDI strategy. In particular, those learning effects seem to be mostly visible when firms engage in vertical outward FDI. Further, vertical or horizontal outward FDI appear to enhance the integration of Portuguese firms into the global economy through increased export intensity. Overall, the findings supports the argument that outward FDI can indeed be at root of upgrading performance and firm’s restructuring in a small, open and peripheral economy such as Portugal. Nonetheless, the capability to be resilient and deal with sudden and external shocks - such as COVID-19 pandemic - is not supported by the available preliminary data.

 

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Número: 167
Autor(es): Catarina Branco | Dirk C. Dohse | João Pereira dos Santos | José Tavares
Mês: Setembro
Ano: 2022

This paper uses micro-level data encompassing the universe of Portuguese private firms for
the period 2006-2016 to analyse the effect of the introduction of tolls on previously toll-free
highways. To establish causality, we rely on a natural experiment which resulted from
Portuguese authorities being forced to in- crease these transportation costs in some highways
during the sovereign debt crisis. Difference-in-differences results show a 10.7% decrease of
turnover in firms located in affected municipalities vis-à-vis firms in the remaining areas, on
average. Firm profits were also severely hit and reduced by more than 15%. Both sales and
purchases to/from the internal market and abroad (especially to/from EU countries) were
affected. Furthermore, employment reduced 2% in treated areas. Importantly, our findings do
not uncover induced inter-regional firm migration, suggesting that the tolls have induced a
substantial net loss to the Portuguese economy.

 

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Número: 166
Autor(es): Maria José Sousa
Mês: Julho
Ano: 2022

Digital technologies and public policies are fundamental for cities to define their urban greening strategies, and the main goal of this research is to identify in the literature and official documents the applied digital technologies and the public policies dimensions implemented at the national level by the member states to promote urban greening. The methodology used is a Systematic Literature Review (based on international studies), a Delphi study with experts, and a Policy Analysis, to understand how the Portuguese government has implemented policies and which are the main applied technologies to urban greening. The main findings are regarding (i) the focus on the interaction of actors in policymaking. (ii) Interpretive approaches examine the application of technologies in urban greening problems; and (iii) how policies reflect the social construction of 'problems'.

 

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Número: 165
Autor(es): Marta Candeias | Nuno Boavida | António Brandão Moniz
Mês: Julho
Ano: 2022

Recent developments in automation and Artificial Intelligence (AI) are leading to a wave of innovation in organizational design and changes in the workplace. Techno-optimists even named it the ‘second machine age’, arguing that it now involves the substitution of the human brain. Other authors see this as just a continuation of previous ICT developments. Potentially, automation and AI can have significant technical, economic, and social implications in firms. The paper will answer the question: what are the implications on industrial productivity and employment in the automotive sector with the recent automation trends, including AI, in Portugal? Our approach used mixed methods to conduct statistical analyses of relevant databases and interviews with experts on R&D projects related to automation and AI implementation. Results suggest that automation can have widespread adoption in the short term in the automotive sector, but AI technologies will take more time to be adopted.

 

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Número: 163
Autor(es): Anabela M. Santos | Javier Barbero Jimenez | Simone Salotti | Andrea Conte
Mês: Julho
Ano: 2022

We assess the effect of digitalisation on employment for the European Union countries, and Portugal in particular, using data for the 1995-2019 period. We estimate an augmented labour demand function derived from a Constant Elasticity of Substitution (CES) cost function to test for a capital-labour substitution effect, distinguishing between digital and traditional capital. The results point towards a positive impact of digital investments on total employment, but the effects are heterogeneous depending on the different employment categories. In particular, high-skilled jobs benefit from digitalisation at the expense of medium- and low-skilled ones.

 

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Número: 164
Autor(es): Joana Costa | Luís Carvalho
Mês: Julho
Ano: 2022

Promoting entrepreneurship has become a government priority worldwide. At the same time, digital technology has been embraced by governmental authorities, particularly focusing on digital infrastructure and online service provision. In this paper, we explore whether there might be a connection between both policy ambitions – notably at the local level. To do so, we empirically assess the relationship between different dimensions of government digitalization and entrepreneurial dynamics, using panel data from 278 Portuguese municipalities between 2014 and 2019, primarily drawn from the Portuguese survey on government ICT deployment (IUTIC) and analyzed through compared regression models. Results suggest an overall positive effect of digital government efforts on entrepreneurship.

 

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Número: 162
Autor(es): Natália Barbosa | Ana Paula Faria
Mês: Julho
Ano: 2022

Digital technologies have the scope to engender positive effects on productivity at firm and aggregate level. However, empirical evidence and theoretical contributions are ambiguous as mixed findings and diverse explanations have been put forward. We use a rich and representative sample of Portuguese firms over the period 2014-2019 to empirically assess the relationship between digital technologies adoption and productivity. Based on estimations over the entire distribution of firm’s productivity, we find that heterogeneous digital technologies affect differently the dynamics of productivity and the convergence to the frontier. This leads to mixed findings with scope to diverse impact in the aggregate productivity.

 

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