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Does Product Market Competition Decrease Employers’ Training Investments? – Evidence from German Establishment Panel Data

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Author Info

  • Katja Görlitz

    ()

  • Joel Stiebale

    ()

Abstract

Using a large panel data set of German manufacturing establishments, this paper investigates the impact of competition on training incidence as well as on the number of trained workers. According to theory, one would expect a negative relationship between product market competition and firms’ incentives to invest in employees’ general skills (Gersbach and Schmutzler 2006). In our empirical analysis, product market competition is approximated by various measures of competition such as the Herfindahl Index, the number of firms at the 3-digit industry level and the price cost margin. After controlling for unobserved heterogeneity across industries and establishments, there is no significant effect of competition on training. This result is robust towards different samples, model specifications and estimation techniques.

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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0041.

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Length: 25 pages
Date of creation: Mar 2008
Date of revision:
Handle: RePEc:rwi:repape:0041

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Related research

Keywords: Training; human capital; product market competition;

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Cited by:
  1. Katja Görlitz, 2010. "The Development of Employers’ Training Investments Over Time – A Decomposition Analysis Using German Establishment Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(2), pages 186-207.
  2. Picchio, M. & Ours, J.C. van, 2010. "Market Imperfections and Firm-Sponsored Training," Discussion Paper 2010-57, Tilburg University, Center for Economic Research.
  3. Eichhorst, Werner & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "A Roadmap to Vocational Education and Training Systems Around the World," IZA Discussion Papers 7110, Institute for the Study of Labor (IZA).
  4. Bender, Stefan & Fertig, Michael & Görlitz, Katja & Huber, Martina & Hummelsheim, Stefan & Knerr, Petra & Schmucker, Alexandra & Schröder, Helmut, 2010. "WeLL - Berufliche Weiterbildung als Bestandteil Lebenslangen Lernens : bisherige Arbeiten und Perspektiven," FDZ Methodenreport 201007_de, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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