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Do Dominant Firms Provide More Training?

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  • Christos Bilanakos
  • Colin P. Green
  • John S. Heywood
  • Nikolaos Theodoropoulos

Abstract

This paper examines the relationship between firm-specific training and product market competition. A canonical Cournot competition model shows that the profitability of training investments increases as the number of competitors decreases. Empirical evidence from British establishments in 1998, 2004 and 2011 confirms that a critical form of specific training, cross-training, is far more extensive in less competitive product markets. This persists within all three separate cross-sections and in two separate panel estimates and suggests that a dominant product market position increases the incentives to invest in specific human capital.

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File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/06-14.pdf
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Bibliographic Info

Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 06-2014.

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Length: 42 pages
Date of creation: May 2014
Date of revision:
Handle: RePEc:ucy:cypeua:06-2014

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Web page: http://www.econ.ucy.ac.cy

Related research

Keywords: Specific training; Cross-training; Product market competition; Panel data;

This paper has been announced in the following NEP Reports:

References

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  1. Acemoglu, D. & Pischki, J.S., 1996. "Why Do Firms Train? Theory and Evidence," Working papers 96-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Alan B. Krueger, 1991. "How Computers Have Changed the Wage Structure: Evidence From Microdata, 1984-1989," NBER Working Papers 3858, National Bureau of Economic Research, Inc.
  3. Laura Abramovsky & Erich Battistin & Emla Fitzsimons & Alissa Goodman & Helen Simpson, 2011. "Providing Employers with Incentives to Train Low-SkilledWorkers: Evidence from the UK Employer Training Pilots," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 29(1), pages 153-193, 01.
  4. William Greene, 2001. "Estimating Econometric Models With Fixed Effects," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 01-10, New York University, Leonard N. Stern School of Business, Department of Economics.
  5. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, volume 1, number 10142.
  6. Bassanini, Andrea & Brunello, Giorgio, 2007. "Barriers to Entry, Deregulation and Workplace Training," IZA Discussion Papers 2746, Institute for the Study of Labor (IZA).
  7. Joseph G. Altonji & James R. Spletzer, 1991. "Worker characteristics, job characteristics, and the receipt of on-the-job training," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(1), pages 58-79, October.
  8. David H. Autor, 2000. "Why Do Temporary Help Firms Provide Free General Skills Training?," NBER Working Papers 7637, National Bureau of Economic Research, Inc.
  9. Jones, Derek & Kalmi, Panu & Kauhanen, Antti, 2009. "The Effects of General and Firm-Spesific Training on Wages and Performance: Evidence from Banking," Discussion Papers, The Research Institute of the Finnish Economy 1184, The Research Institute of the Finnish Economy.
  10. Lalith Munasinghe & Brendan O'Flaherty, 2005. "Specific Training Sometimes Cuts Wages and Always Cuts Turnover," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 23(2), pages 213-234, April.
  11. Alison L. Booth & Mark L. Bryan, 2005. "Testing Some Predictions of Human Capital Theory: New Training Evidence from Britain," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 391-394, May.
  12. Enrico Moretti, 2004. "Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions," American Economic Review, American Economic Association, vol. 94(3), pages 656-690, June.
  13. Richard Blundell & Lorraine Dearden & Costas Meghir & Barbara Sianesi, 1999. "Human capital investment: the returns from education and training to the individual, the firm and the economy," Fiscal Studies, Institute for Fiscal Studies, vol. 20(1), pages 1-23, March.
  14. Brunello, Giorgio & Gambarotto, Francesca, 2007. "Do spatial agglomeration and local labor market competition affect employer-provided training? Evidence from the UK," Regional Science and Urban Economics, Elsevier, vol. 37(1), pages 1-21, January.
  15. Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 117(5), pages 914-940, October.
  16. Acemoglu, Daron, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(3), pages 445-64, July.
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