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Scale in Technology and Learning-by-Doing in the Windmill Industry

Author

Listed:
  • Madsen, Erik Strøjer

    () (Department of Economics, Aarhus School of Business)

  • Jensen, Camilla

    (Copenhagen Business School)

  • Hansen, Jørgen Drud

    (University of Southern Denmark)

Abstract

This paper examines the remarkable development of technology and the fast learning-by-doing in the windmill industry since it emerged in the beginning of the 1980s. Based on time series of prices of windmills a dynamic cost function for producing windmills is tested. The estimations verified that learning-by-doing in the Danish windmill industry has contributed significantly to improve the cost efficiency of the producers. The technological development has been stimulated both by process and product innovations as the capacity of the individual mills has increased. The learning effect created by early subsidies from the government has consolidated the competitive advantages of the windmill cluster in Denmark and preserved the first mover advantages at the world market. The article concludes that the industry probably will enter into a matured phase in the future with more modest technological growth.

Suggested Citation

  • Madsen, Erik Strøjer & Jensen, Camilla & Hansen, Jørgen Drud, 2002. "Scale in Technology and Learning-by-Doing in the Windmill Industry," Working Papers 02-2, University of Aarhus, Aarhus School of Business, Department of Economics.
  • Handle: RePEc:hhs:aareco:2002_002
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    File URL: http://www.hha.dk/nat/WPER/02-2_esm.pdf
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    References listed on IDEAS

    as
    1. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
    2. Stokey, Nancy L, 1988. "Learning by Doing and the Introduction of New Goods," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 701-717, August.
    3. Bahk, Byong-Hong & Gort, Michael, 1993. "Decomposing Learning by Doing in New Plants," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 561-583, August.
    4. Dasgupta, Partha & Stiglitz, Joseph E, 1988. "Learning-by-Doing, Market Structure and Industrial and Trade Policies," Oxford Economic Papers, Oxford University Press, vol. 40(2), pages 246-268, June.
    5. Young, Alwyn, 1993. "Invention and Bounded Learning by Doing," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 443-472, June.
    6. C. Lanier Benkard, 1999. "Learning and Forgetting: The Dynamics of Aircraft Production," NBER Working Papers 7127, National Bureau of Economic Research, Inc.
    7. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
    8. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
    9. Morthorst, P. E., 1999. "Capacity development and profitability of wind turbines," Energy Policy, Elsevier, vol. 27(13), pages 779-787, November.
    10. Kazuhiro Mishina, 1999. "Learning by New Experiences: Revisiting the Flying Fortress Learning Curve," NBER Chapters,in: Learning by Doing in Markets, Firms, and Countries, pages 145-184 National Bureau of Economic Research, Inc.
    11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Malte Schwoon, 2006. "Learning-by-doing, Learning Spillovers and the Diffusion of Fuel Cell Vehicles," Working Papers FNU-112, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2006.
    2. Brandt, Urs Steiner & Svendsen, Gert Tinggaard, 2003. "The coalition of industrialists and environmentalists in the climate change issue," Working Papers 03-18, University of Aarhus, Aarhus School of Business, Department of Economics.
    3. Lindman, Åsa & Söderholm, Patrik, 2012. "Wind power learning rates: A conceptual review and meta-analysis," Energy Economics, Elsevier, vol. 34(3), pages 754-761.
    4. Sascha Samadi, 2016. "A Review of Factors Influencing the Cost Development of Electricity Generation Technologies," Energies, MDPI, Open Access Journal, vol. 9(11), pages 1-25, November.
    5. Andreas Freytag & Leo Wangler, 2008. "Strategic Trade Policy als Response to Climate Change? The Political Economy of Climate Policy," Jena Economic Research Papers 2008-001, Friedrich-Schiller-University Jena.
    6. Jørgen Hansen & Camilla Jensen & Erik Madsen, 2003. "The establishment of the danish windmill industry—Was it worthwhile?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(2), pages 324-347, June.
    7. Carsten Daugbjerg & Gert Svendsen, 2011. "Government intervention in green industries: lessons from the wind turbine and the organic food industries in Denmark," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 13(2), pages 293-307, April.
    8. Nemet, Gregory F., 2006. "Beyond the learning curve: factors influencing cost reductions in photovoltaics," Energy Policy, Elsevier, vol. 34(17), pages 3218-3232, November.
    9. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2003. "Fighting windmills? EU industrial interests and global climate negotiations," Working Papers 37/03, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    10. Malte Schwoon, 2006. "A Tool to Optimize the Initial Distribution of Hydrogen Filling Stations," Working Papers FNU-110, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2006.

    More about this item

    Keywords

    Learning-by-doing; scale in technology; process and product innovations;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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