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The Impact of Employees' and Managers' Training on the Performance of Small- and Medium-Sized Enterprises: Evidence from a Randomized Natural Experiment in the UK Service Sector

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  • Andreas Georgiadis
  • Christos N. Pitelis

Abstract

We investigate the relationship between employees' and managers' training and firm performance using a policy intervention that randomly assigned training support to small- and medium-sized enterprises in the UK accommodation and food service sector. Because the number of firms self-selected into training exceeded available places, training was randomly assigned to some firms, resulting in a randomized natural experimental design that allowed us to identify the average effect of training on treated firms. Our empirical results suggest that employees' training had a stronger positive impact on firms' labour productivity and profitability than that of managers'.

Suggested Citation

  • Andreas Georgiadis & Christos N. Pitelis, 2016. "The Impact of Employees' and Managers' Training on the Performance of Small- and Medium-Sized Enterprises: Evidence from a Randomized Natural Experiment in the UK Service Sector," British Journal of Industrial Relations, London School of Economics, vol. 54(2), pages 409-421, June.
    • Handle: RePEc:bla:brjirl:v:54:y:2016:i:2:p:409-421
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    File URL: http://hdl.handle.net/10.1111/bjir.12094
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    2. Juan F. Castro & Paul Glewwe & Ricardo Montero, 2019. "Work With What You’ve Got: Improving Teachers’ Pedagogical Skills at Scale in Rural Peru," Working Papers 158, Peruvian Economic Association.
    3. Heller-Sahlgren, Gabriel, 2023. "Lifelong learning and employment outcomes: evidence from Sweden," LSE Research Online Documents on Economics 115171, London School of Economics and Political Science, LSE Library.
    4. Ashraf Elsafty & Mahmoud Oraby, 2023. "The Impact of Training on Employee Retention: An Empirical Research on the Private Sector in Egypt," International Journal of Business and Management, Canadian Center of Science and Education, vol. 17(5), pages 1-58, February.
    5. Tobias Schultheiss & Uschi Backes-Gellner, 2021. "Different degrees of skill obsolescence across hard and soft skills and the role of lifelong learning for labor market outcomes," Economics of Education Working Paper Series 0188, University of Zurich, Department of Business Administration (IBW), revised Sep 2022.
    6. Gonzalo Nunez-Chaim & Henry G. Overman & Capucine Riom, 2024. "Does subsidising business advice improve firm performance? Evidence from a large RCT," CEP Discussion Papers dp1977, Centre for Economic Performance, LSE.
    7. Georgios Fotopoulos & David J. Storey, 2019. "Public policies to enhance regional entrepreneurship: another programme failing to deliver?," Small Business Economics, Springer, vol. 53(1), pages 189-209, June.
    8. Busso, Matías & Park, Kyunglin & Irazoque, Nicolás, 2023. "The Effectiveness of Management Training Programs: A Meta-Analytic Review," IDB Publications (Working Papers) 12782, Inter-American Development Bank.
    9. Suhaib Ahmad & Abdurrahman Adamu Pantamee & Syed Moin-ud-Din Shah, 2020. "The Role of Human Resource Management Practices on Palm Oil Firm’s Performance in Malaysia with Mediating Role of Organizational Learning Capabilities and Moderating Role of Organizational Support," iRASD Journal of Management, International Research Alliance for Sustainable Development (iRASD), vol. 2(1), pages 22-33, June.
    10. Li, Changhong & Li, Jialong & Wu, Zhenyu, 2017. "Dark side of investment in employee education in privately-held companies," Finance Research Letters, Elsevier, vol. 22(C), pages 190-196.

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