Toward an Understanding of Learning by Doing: Evidence from an Automobile Assembly Plant

We use highly detailed data from an assembly plant of a major auto producer to investigate the learning by doing process. We focus on the acquisition, aggregation, transmission, and embodiment of the knowledge stock built through learning. We find that most of the substantial learning by doing knowledge at the plant was not retained by the plant’s workers, even though they were an important conduit for knowledge acquisition. This finding is consistent with the plant’s institutionalized systems for productivity measurement and improvement. We further explore how overall learning is undergirded by what happens at the hundreds of individual processes along the production line, revealing aspects of the learning process in a complex production system rarely observed by researchers. These results shed light not only on how productivity gains accrue at the plant level, but also how firms might apply managerial inputs to expand production optimally. They also provide some empirical content suggesting how comparative advantage arises and what leads to specialization. ∗ We received generous help from numerous individuals at the auto manufacturer from which our data are obtained, but we would especially like to thank Rich D., Shannon A., and Robert M. In particular, Marco O. was an invaluable