Reaggregation and firm-level inference in multiplant technologies

We examine conditions under which plant-level data can be used to make firm-level inferences about technology, supply, and demand. Global conditions for such reaggregation involve nonjointness restrictions in both the plant and product dimensions. In the neighborhood of the firm’s fixed overheads, however, restrictions may be eased by appealing to a multiplant generalization of Kohli’s notion of almost nonjointness, which we term “almost reaggregation.” While global conditions for almost reaggregation are the same as for full reaggregation, the local conditions outlined are more easily satisfied. Analysts thus are less likely to commit reaggregation bias when firm-level overheads are constant, and can take advantage of this conclusion through judicious model design.