Lisa Beihy Pacheco

The goal of this paper is to study the diffusion of green technologies. I consider the case of photovoltaic panels (PV) adoption by firms in Brazil, and evaluate the pattern of adoption and how it relates to price mechanisms and technology suitability. The purpose of the paper is to provide insight into the mechanisms that determine the adoption of photovoltaic energy, offering reduced-form evidence of the investment pattern across locations. To do so, I estimate the effects of local energy prices and heterogeneous geographic suitability for solar power generation on PV investment at the municipal level. Higher energy prices are positively correlated with higher solar adoption, indicating that firms switch to photovoltaic generation more often when gains from lower energy bills are greatest, and that adoption was higher where energy tariff subsidies represented larger shares of the total energy bill. I also find that within regions greater solar suitability is also positively correlated with higher adoption and that this effect is only significant in years when adoption is the most intensive. Additionally, I show that larger and older firms are overrepresented among adopters, possibly indicating that informational frictions and credit constraints might play a role in adoption. Finally, in future versions of this paper, I discuss the next steps and present a theoretical investment model to be estimated with firm-level data.

Understanding non-competitive behavior in labor markets has become crucial to gain insight into labor market dynamics, and estimating labor supply wage elasticities can help determine the existence of oligopsony power. By building on Manning (2003), I use matched employer-employee data, and take advantage of sector-specific shocks to payroll taxes, to estimate labor supply wage elasticities for the Brazilian labor market. I estimate separation and recruitment elasticities using an IV approach that allows for the identification of exogenous variation in wages through the reform on payroll taxes implemented in Brazil, which represents shocks to labor demand. While standard OLS estimates are low (and unrealistic) as in the recent literature, estimates using the IV approach are much more reasonable. Results indicate that there exists considerable labor market power by firms in Brazil, with a market-level elasticity of 1.4 and a firm-level elasticity of 4.4. Finally, I evaluate whether oligopsony power is different between skill levels, as well as between more or less urbanized and informal municipalities. I find that firms exert higher markdowns for low-skill workers, and that higher labor market power is correlated with lower urbanization and higher informality.