Growth accounting literature assumes systematically technological change to be
Hicks-neutral18. Thus, TFP growth is usually captured by the inclusion of an exponential time
trend to the regression analysis (Chow and Li, 2002; Chow 1993; Wu, 2004). In the
production function estimates, we relax Hicks neutral technological change assumption and
allow for factor augmenting technological progress. Thereby, the constant term in the
regression analysis captures any form of technological change, namely both Hicks-neutral and
factor-augmenting (capital-augmenting and labour-augmenting).