We investigate the effect of the rise in product market competition, measured by the increase in Chinese exports to Mexico and the US, on the productivity of Mexican plants between 1994 and 2007. We use detailed panel data on Mexican manufacturers matched with trade data at the product level....

This paper proposes a novel method to estimate productivity and quality at the firm-product level, together with transformation function and demand parameters. The method relies on firm optimization conditions to obtain a one-to-one mapping between observed data and unobserved productivity and...