Learning mechanisms and firms’ performance in the global south: reflections from Ludhiana’s manufacturing firms

Purpose This study examines the impact of doing, using and interacting (DUI) and science, technology and innovation (STI) learning mechanisms on firm performance, investigating their influence on financial performance through innovative performance in machine tools and textile manufacturing firms in Ludhiana, Punjab, India. Design/methodology/approach Primary data was collected through a survey of 202 manufacturing firms across two industries, as secondary data inadequately captures learning mechanisms, particularly for DUI mode. The study employed structural equation modelling (SEM) alongside descriptive analysis to examine the impact of STI–DUI learning mechanisms on performance. Findings The study reveals that firms, despite minimal investment in formal R&D, effectively learn through networking and imitation (DUI mechanisms). They also benefit from local industrial training institutions. Notably, innovative performance mediates the relationship between learning mechanisms (imitation, networking and industry institutions) and firms' financial performance. Originality/value The literature was found to be scant in terms of understanding the nature of firms learning mechanism, especially for the firms undertaken for the analysis. Although having distinguished nature of knowledge and learning required to compete for the products manufactured in machine tools and textiles industries, local conditions, domestic national institutions and regional aspects makes the industries unique case to understand the challenges amidst unique features of these industries. The study is expected to fill-in the gap in the literature of manufacturing industries belonging to developing countries in the era of increasing technological competition in the integrated world economies.