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The Impact of Firm-Provided Training on Production: Testing for Firm-Size Effects

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  • Jan M.P. de Kok

    ()
    (EIM Business & Policy Research, Zoetermeer, and Erasmus University Rotterdam)

Abstract

The returns to firm-provided training depend on many differentfactors. Firm size is an importantindicator of various of these factors, but recent research tends toneglect it. In this study thereturns to firm-provided training are estimated, taking account ofthree possible firm-sizeeffects: the HRM effect, selection effect and scale effect. Usingpanel data on 173 Dutch firms,support is found for the existence of the HRM effect: trainingsupport per working day (theaverage time a firm spends on setting up and coordinating a trainingprogram) has a positiveinfluence on the returns to training. In the absence of trainingsupport, training has no effect onproduction. Since on average smaller firms provide less trainingsupport per working day, thisimplies that small firms benefit less from firm-provided trainingthan their larger counterparts.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-073/3.

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Date of creation: 29 Aug 2000
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Handle: RePEc:dgr:uvatin:20000073

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Web page: http://www.tinbergen.nl

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  1. Wim Groot, 1999. "Productivity effects of enterprise-related training," Applied Economics Letters, Taylor & Francis Journals, vol. 6(6), pages 369-371.
  2. Lisa M Lynch & Sandra E Black, 2002. "Beyond the Incidence of Training: Evidence from a National Employers Survey," Working Papers 02-05, Center for Economic Studies, U.S. Census Bureau.
  3. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  4. John M. Barron & Mark C. Berger & Dan A. Black, 1997. "On-the-Job Training," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ojt.
  5. John M. Barron & Mark C. Berger & Dan A. Black, 1999. "Do Workers Pay for On-The-Job Training?," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 235-252.
  6. Frank Corvers, 1997. "The impact of human capital on labour productivity in manufacturing sectors of the European Union," Applied Economics, Taylor & Francis Journals, vol. 29(8), pages 975-987.
  7. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-71, January.
  8. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  9. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
  10. John Bishop, 1994. "The Impact of Previous Training on Productivity and Wages," NBER Chapters, in: Training and the Private Sector, pages 161-200 National Bureau of Economic Research, Inc.
  11. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
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