Exporting Firms, the Extensive Margin of Adjustment, and the Incomplete Exchange Rate Pass-Through

International trade research has recently shifted towards the study of the behavior of firms. The use of micro-level data stressed the inadequacy of existing models in explaining trade patterns. The new models in trade theory emphasize the role of heterogeneity of firms and the mechanisms that self-select firms into exporting. The extensive margin of trade (i.e., number of firms) gained importance. More recently, the availability of customs data with both product and firm-level information is allowing the study of the impact of an additional extensive margin of trade, i.e., the extensive margin of products.;In the first chapter of my dissertation, I document the patterns of Brazilian exports. I explore whether the firms have multiple products and the extent to which they export to many different countries. Also, I document the relative importance of the exports of each group of exporters. In general, I find that the patterns of Brazilian exports do not differ significantly from the patterns for the U.S. documented by Bernard, Redding, Schott (2007).;In the second chapter, I show that one implication of standard heterogeneous firm models is that the entry of firms and products into the export market at the event of a currency devaluation should decrease the aggregate exchange rate pass-through. In this chapter, I use detailed micro-level data for Brazil to investigate this hypothesis. The empirical results suggest that the extensive margin of adjustment has a low impact on aggregate pass-through, which does not support the predictions of the simple version of the model. To further explore the role of the extensive margin, I analyze the pricing behavior of new and incumbent firms. Consistent with the model, I find that the prices charged by new entrants tend to be higher, which should lower the observed degree of pass-through. However, the analysis also indicates that the pricing patterns are substantially more complicated than in the simple model, as pricing behavior is affected by firms' previous exporting experience, presence in other export markets, and exit.;The third chapter analyzes the behavior of export prices. I investigate whether new exporting firms charge higher, lower or similar prices than incumbents. I, then, investigate if there is some pricing dynamics. I show that in sectors with low elasticity of demand, new exporters tend to charge lower prices than incumbents. These firms tend to increase prices over the lifecycle, adjusting them towards the prices of incumbents. This is in contrast with the predictions of Melitz-like models. In the sectors with high elasticity of demand, new exporters tend to charge higher prices than incumbents and there is no strong evidence of any export pricing dynamics.