As an alternative, some studies have relied on a two-stage decomposition: in a first stage, a productivity index is estimated; in a second stage, the productivity index is regressed on research and other variables to explain technical progress (Knutson and Tweeten; Evenson 1984). This assumes implicitly that a productivity index can be calculated independently of the nature of technical progress. However, the validity of productivity indices can be affected by the na¬ture of technical change (see Diewert 1976, and Caves, Christensen, and Diewert, p. 77, foot¬note 2).