Learning by Doing Spillovers in the Semiconductor Industry

Learning by Doing Spillovers in the Semiconductor Industry: Irwin and Klenow 1994 Name: Course title: Professor: Institution: Date Due:  In the article termed “learning by doing spillovers”, the authors assessed the aspect of learning by action as one of the features in the industry of semi conductors. Their focus in the semi conductor industry was driven by among other factors, the significance of semi conductors in firms that are related to high technology. Comparing the industrial policies of Japan and US, Klenow and Irwin argues that the favorable industrial policies in this industry in Japan has consequently enabled Japanese organizations to triumph with regard to the aspect of learning by doing and subsequently displacing their US counterparts. Klenow and Irwin assert that it is important to document the particular spillovers in this industry. This is useful in evaluating regulations relating to this spillover as well as in understanding the contribution of learning in endogenous development. The authors employed quarterly data on firm level in a range of seven generations of dynamic, random access memory semiconductors from the year 1974 to 1992. Among the findings in the study were that the rate of learning averaged 20%. Organizations learn three times more from an extra unit of another organization’s gross production. Learning spills over the same way between organizations in different nations as it is within a particular nation. In addition, the authors also present findings that Japanese organizations could not be distinguished from others in terms of learning speed. Moreover, learning spill over in intergeneration was weak, except in two of the seven DRAM generations examined in the study. According to the authors of this paper, the dominance of Japan with regard to semi conductors has subsequently led to a general concern in this matter. This concern relates that American firms may f...