Learning-by-Doing Spillovers in the Semiconductor Industry

Abstract

The semiconductor industry is often cited as a strategic industry in part because important learning spillovers may justify special industrial policies. Using quarterly, firm-level data on seven generations of dynamic random access memory semiconductors over 1974-92, the authors find that learning rates average 20 percent, firms learn three times more from an additional unit of their own cumulative production than from an additional unit of another firm's cumulative production, learning spills over just as much between firms in different countries as between firms within a given country, and intergenerational learning spillovers are weak. Copyright 1994 by University of Chicago Press.