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LEARNING‐BY‐DOING AND MARKET STRUCTURE *
Author(s) -
BALASUBRAMANIAN NATARAJAN,
LIEBERMAN MARVIN B.
Publication year - 2011
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.1467-6451.2011.00450.x
Subject(s) - sunk costs , production (economics) , function (biology) , estimation , econometrics , economics , learning by doing , industrial organization , business , mathematics , statistics , microeconomics , management , evolutionary biology , biology
Applying the Olley‐Pakes estimation technique to an augmented production function, we estimate rates of learning‐by‐doing in over 250 SIC4 industries in the U.S. manufacturing sector. We then examine the link between learning and producer concentration using Sutton's bounds approach. We find that the lower bound of concentration is higher in high‐learning industries, which suggests that learning‐by‐doing has characteristics of an endogenous sunk cost.