Economists have recently put a great deal of attention on the interaction between financial and product markets. The current dissertation is a set of two studies in this area. In the first chapter. we propose and perform an empirical experiment to isolate the two factors pointed by Hou and Robinson [1] as potential causes of the trade-off between stock returns and industry concentration. These two factors are innovation risk and distress risk. Brazilian law restricts bankruptcy prospects of State Controlled Enterprises. giving us a natural experiment that allows us to separate the two effects. Using data from Brazilian firms, we find evidence of a returns/concentration trade-off linked to distress risk, but no evidence of such a trade-off associated with innovation risk. Instead, we find a positive innovation-driven relation between returns and concentration. indicating that monopolistic firms might be the ones investing the most in R&D. These findings support Bain's [2] Market Power hypothesis. but are inconsistent with Schumpeter's [3] Creative Destruction hypothesis. In the second chapter, co-authored with Jose A. Rodrigues-Neto. the market for status goods with fixed costs is analyzed. In our model, firms produce and sell different brands of pure status goods to a population that is willing to signal individual abilities to potential matches in a different population. There is a stratified equilibrium with a finite number of brands. Under constant tax rates, monopolies sell different brands to social classes of equal measure. while in contestable markets, social classes have decreasing measures. Under optimal taxation, contestable markets have progressive tax rates, while monopolies face an adequate flat tax rare to all brands.