Learning-by-Doing or Technological Leapfrogging: Production Frontiers and Efficiency Measurement in Norwegian Salmon Aquaculture

This paper analyzes the existence of learning-by-doing and technological leapfrogging effects in Norwegian salmon aquaculture. The salmon industry has experienced rapid technological progress and productivity growth over recent decades. Firms entering innovative industries may be able to leapfrog incumbent firms by bypassing heavy investments in older technologies, and taking advantage of best-practice technology that was previously unavailable. An alternative hypothesis that explains different productivity levels is the learning-by-doing hypothesis, where incumbent firms benefit from more experience. A stochastic production frontier model was estimated on a large panel of firms. Our results suggest that entering firms aged 3 to 5 years perform slightly better than older firms with respect to technical efficiency, and thereby support the technological leapfrogging hypothesis. This may indicate that entering firms take advantage of improved technologies compared with incumbent firms with older capital vintages, although it takes some time before the new technology becomes fully productive.