35,000 observations. We match the information on plant characteristics with the F3 data on plant products. This allows us to identify the specific goods that the plants produce. It should be noted that more than 95 percent of the plants produce for single-plant firms in 1996, the only year with firm- and plant-level information available. The definition of a product is specific to the dataset. Available information indicates that it is more disaggregated than a seven-digit Second Revision International Standard Industry Classification (ISIC). Hereafter, “product” or “ENIA product” will refer to the more disaggregated definition. The products can be assigned to different seven-digit and more aggregated ISIC categories: two-digit ISIC categories will be referred to as “sectors” and fourdigit ISIC categories will be known as “industries.” There are 10 sectors, 95 industries, 264 fivedigit ISIC categories, 2,141 seven-digit ISIC categories, and 3,575 ENIA products in the pooled sample. Table 16 presents information on the number of plants and products under alternative product aggregations. Finally, the distribution of products by sector is highly heterogeneous. The number of products by sector ranges from 121 to the 1,296 products produced in the Fabricated Metal Products, Machinery and Equipment sector. 12 It is also essential to obtain a measure of total factor productivity (hereafter, TFP) for the analysis. TFP is a residual of an estimated production function. We estimate value-added production functions at the two-digit ISIC level following the Levinsohn and Petrin (2003) technique. This leads to the elimination of around 3,000 plant observations for which TFP measures cannot be obtained. 13 The data on plants’ products by year allows us to identify product-mix changes over time and makes it possible to obtain objective measures of product innovation. Those plants that changed their product mix by adding and/or dropping products can be considered innovators. Table 17 presents information on the percentage of plants that introduced different types of changes in their output structure. It shows that almost one-fourth of plants introduced any type of product-mix changes per year and that two-thirds of the changes involved the addition of new products (column Add). The table distinguishes between plants that changed their product mix for the first time (column First) and those that did it by adding products (column First Add). On
12
For more details on the dataset, see Navarro (2008). This is the case of plants for which there is missing information on some of the inputs of the production function or plants that are not active for consecutive years. 13
15