Learning across policy regimes: case study of the Indian Automobile Industry

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Abstract:

Learning is an important factor that explains inter-firm differences in performances over time. This paper analyzes the impact of government policy regime on the learning abilities of firms and markets over time. Through a case study analysis of the Indian automotive industry, the paper develops three hypotheses relating policy regimes with learning strategies of firms. The paper tests these hypotheses through a model of learning using a panel data for the Indian automotive industry. The study finds that speed of knowledge assimilation is more important in the liberalized policy regime vis-à-vis protection when knowledge assimilation per se was a more important economic goal.