Unveiling Plant‐Product Productivity via First‐Order Conditions: Robust Replication of Orr (2022)

Joonkyo Hong and Davide Luparello

Journal of Applied Econometrics, 2026, vol. 41, issue 2, 216-222

Abstract: We assess the replicability of Orr's (2022) method for estimating within‐plant productivity across product lines, which combines demand estimation with cost minimization. The original study uses input price shocks in other output markets as instrumental variables, with exclusion restrictions based on downstream purchase shares. Reconstructing the original dataset of Indian machinery producers from 2000–2007, we reproduce the main productivity patterns and demonstrate their robustness to variations in the exclusion threshold. The main results remain robust in extended samples (2010–2019, 2000–2019) when calibrating demand parameters to Orr's (2022) estimates for 2000–2007, as estimation on these extended periods yields inadmissible demand systems.

Date: 2026
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