2016/26 LEM Working Paper Series

The cost-quantity relations and the diverse patterns of “learning by doing”: Evidence from India

Giovanni Dosi, Marco Grazzi and Nanditha Mathew
Learning-by-doing, learning curves, product innovation, process innovation

  JEL Classifications
D22, D24, L6, O3

“Learning-by-doing” is usually identified as a process whereby performance increases with experience in production. The paper investigates different patterns of “learning by doing”, studying learning curves at product level in a catching-up country, India. Cost-quantity relationships differ a lot across products belonging to sectors with different “technological intensities”. We find also, puzzlingly, in quite a few cases, that the relation price/cumulative quantities is increasing. We conjecture that this is in fact due to quality improvement and 'vertical' product differentiation. Circumstantial evidence rests on the ways differential learning patterns are affected by firm spending on research and capital investments. Finally, our evidence suggests that “learning”, or performance improvement over time is not a just by-product of the mere repetition of the same production activities, as sometimes reported in previous studies, but rather it seems to be shaped by deliberate firm learning efforts.
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