Firm-specific learning-by-doing in semiconductor production: Some evidence from the 1986 Trade Agreement

Studies of the economic effect of learning-by-doing in production have been hampered by the difficulty in obtaining firm-specific cost of production data. After the 1986 Trade Agreement between the United States and Japan, the U.S. Commerce Department made public masked versions of the cost of production of many semiconductor products sold in the U.S. by Japanese firms. This paper presents some of these masked, quarterly, firm-specific production cost data for different densities of DRAMs and EPROMs. The data do not give much support to the hypothesis of strong firm-specific learning-by-doing in semiconductor production. The rate of learning-by-doing may also differ significantly across firms, which also casts doubt on the impact of learning-by-doing on market structure.