Learning and Capability Acquisition: A Case Study of the Indian Automobile Industry

This study analyzes the impact of government policy regime on the learning and capability acquisition of firms over time. Through a case study analysis of the Indian automotive industry, the study develops three hypotheses relating policy regimes with learning strategies of firms. The study tests these hypotheses through a model of learning using a panel data for the Indian automotive industry. It 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.