This paper proposes a novel method to estimate productivity and quality at the firm-product level, together with … between observed data and unobserved productivity and quality. It has the advantage of allowing for heterogeneous unobserved … relying on productivity evolution. We apply this method to a set of Mexican manufacturing industries. We find that multi …

adjust traditional measures of multi factor productivity growth for variations in short-run utilization …

firms, and the fact that larger firms supply more products than smaller firms, implies that standard productivity measures … are not independent of demand system assumptions and probably dramatically understate the relative productivity of the …