  There is growing empirical evidence that firm heterogeneity is
technologically non-neutral. This paper extends Gandhi et al.'s (2020) proxy
variable framework for structurally identifying production functions to a more
general case when latent firm productivity is multi-dimensional, with both
factor-neutral and (biased) factor-augmenting components. Unlike alternative
methodologies, our model can be identified under weaker data requirements,
notably, without relying on the typically unavailable cross-sectional variation
in input prices for instrumentation. When markets are perfectly competitive, we
achieve point identification by leveraging the information contained in static
optimality conditions, effectively adopting a system-of-equations approach. We
also show how one can partially identify the non-neutral production technology
in the traditional proxy variable framework when firms have market power.
