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Industry Learning Environments and the Heterogeneity of Firm Performance

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  • Natarajan Balasubramanian
  • Marvin Lieberman

Abstract

This paper characterizes inter-industry heterogeneity in rates of learning-by-doing and examines how industry learning rates are connected with firm performance. Using data from the Census Bureau and Compustat, we measure the industry learning rate as the coefficient on cumulative output in a production function. We find that learning rates vary considerably among industries and are higher in industries with greater R&D, advertising, and capital intensity. More importantly, we find that higher rates of learning are associated with wider dispersion of Tobin’s q and profitability among firms in the industry. Together, these findings suggest that learning intensity represents an important characteristic of the industry environment.

Suggested Citation

  • Natarajan Balasubramanian & Marvin Lieberman, 2006. "Industry Learning Environments and the Heterogeneity of Firm Performance," Working Papers 06-29, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:06-29
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    References listed on IDEAS

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    Keywords

    Learning; Firm Heterogeneity; RBV; Productivity;
    All these keywords.

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