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

Joonkyo Hong and Davide Luparello

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Abstract: We assess the replicability of Orr (2022)'s 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. Using the original dataset of Indian machinery producers from 2000-2007, we successfully reproduce the main productivity patterns and demonstrate their robustness to variations in the exclusion threshold. However, extending the analysis to 2010-2019 and 2000-2019 periods yields inadmissible demand systems. Nevertheless, the main results remain robust when calibrating demand parameters to Orr (2022)'s original estimates.

Date: 2025-01, Revised 2025-09
New Economics Papers: this item is included in nep-eff and nep-inv
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