Learning by Doing and Spillovers: Evidence from Firm-Level Panel Data

We extend the Bahk and Gort (1993) approach of testing for the impact of learning by doing (LBD) on firm productivity using data on a panel of Spanish manufacturing firms over the 1990-1998 period. While our results indicate evidence in support of the role of LBD, we show that this hinges on controlling for unobservable time invariant firm specific effects. Our results also suggest that spillovers from the accumulated experience within an industry can enhance firms' productivity, especially for established firms. Moreover, the level of embodied technology can improve the learning experience of some firms but only through firms' experience.