_Correntes do Com ́ercio Extracomunit ́ario_ [Current Statistics on Extra-community Trade]).<sup>6</sup> 2. _Inqu ́erito Anual `a Produ ̧c ̃ao Industrial (IAPI)_ [Annual Survey of Industrial Production], a special survey that solicits information on values and physical quantities of outputs, material inputs, and energy sources of firms. The product-level information is reported using a 12digit PRODCOM classification, with approximately 5,300 different products, 3,300 different material inputs, and 17 different energy sources appearing in the data. The IAPI data are available for the period 1997-2005, with 6,800-8,300 manufacturing firms covered during 1997-2001 and a reduced number (2,300-3,900 manufacturing firms) covered in 2002-2005.<sup>7</sup> To provide summary statistics, we supplemented this survey with additional information on manufacturing firms’ attributes from the _Sistema de Contas Integradas das Empresas (SCIE)_ [Enterprise Integrated Accounts System], which provides a census of firms in 2005.<sup>8</sup> We supplement these data with information on country characteristics from the World Bank’s World Development Indicators and CPI and nominal exchange rate information from the IMF’s International Financial Statistics.

Our firm-level estimation sample consists of manufacturing firms in the IAPI survey with information on input purchases and physical quantities and output sales and quantities at the product level. If a firm appears in the IAPI survey but not in the export or import customs data, we assume that it had zero exports or imports. Table 1 reports summary statistics on our estimation sample and the full set of exporters and importers in the customs data in 1997. Firms in our estimation sample tend to have larger export revenues per year, serve more destinations, export in more different product categories, source inputs from more countries, and source more different types of inputs than firms in the full customs data set. Table 2 displays further de6The extra-community trade statistics capture the universe of external trade transactions. The intra-community statistics capture shipments from firms registered in the value-added tax system whose value of annual shipments exceed a cut-off that has changed over time. In 2005, for instance, the cut-off was 85,000 Euros. See Bastos and Silva (2010) for further details.

> 7From 1997-2001 the IAPI was intended to include manufacturing firms to cover 90% of total manufacturing sales. Firms were ranked in descending order of sales and included until the 90% threshold was reached, with some minor qualifications: all firms with 20 or more employees were included, all firms in sectors with fewer than 5 firms were included, and once included in the sample firms were followed in subsequent years. In 2002-2005, for budgetary reasons, the set of sectors covered by the survey was reduced. These sampling procedures make it difficult to make cross-sectional comparisons by firm size (in contrast to Kugler and Verhoogen (2012) who had access to data with wider and more consistent coverage). Our main focus in this paper is on within-firm changes over time, conditional on a firm being sampled.

> 8To reduce the influence of outliers in the IAPI unit values data, we followed a suggestion of Angrist and Krueger (1999) and “winsorized” the unit values within product category, pooling across years, mapping observations below the 1<sup>_st_</sup> percentile of the distribution of real unit values to the 1<sup>_st_</sup> percentile and observations above the 99<sup>_th_</sup> percentile to the 99<sup>_th_</sup> . The results reported below are robust to not winsorizing, or winsorizing by product-year.

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