I Methodology The ranslog index of totaL Factor Productivity growth Consider the translogarithmic value added production function: (2. 1)2=expla+arInk +aInL +a,f+=Br(nk) +Baln)n)+BlnK+Bn)+Blm:t+3B where K, L and t denote capital input, labour input and time, and where, under the assumption of constant returns to scale, the parameters a and Ba satisfy the restrictions: (2.2)ax+aL=1 Br+BrL= Bu+Br Br+BL =0 First differencing the logarithm of the production function provides a measure of the causes of growth across discrete time periods Q+1/=6 Q() KT) +TFP T-1) 了-L了 whe百=()+6,7-1) and where the e;'s denote the share of each factor in total factor payments. The translog index of TFP growth(TFPT- 1r provides a measure of the amount the log of output would have ncreased had all inputs remained constant between two discrete time periods. In essence, the translog production function provides a theoretical justification for the use of average factor shares and log differences as a means of extending the continuous time Divisia analysis of