IDEAS home Printed from https://ideas.repec.org/a/bla/jemstr/v26y2017i1p67-95.html
   My bibliography  Save this article

Do Dominant Firms Provide More Training?

Author

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

Abstract

A canonical Cournot competition model shows that the profitability of training can increase as the number of competitors decreases. British establishment evidence from 1998, 2004, and 2011 confirms that firms in less competitive markets provide more formal training. This persists within three separate cross‐sections and in two separate panel estimates. It persists with alternative measures of training, with alternative measures of market competition and in estimates designed to account for endogeneity. These results suggest that a dominant product market position, indeed, increases the incentives to invest in training.

Suggested Citation

  • Christos Bilanakos & Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2017. "Do Dominant Firms Provide More Training?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 67-95, February.
  • Handle: RePEc:bla:jemstr:v:26:y:2017:i:1:p:67-95
    DOI: 10.1111/jems.12177
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jems.12177
    Download Restriction: no

    File URL: https://libkey.io/10.1111/jems.12177?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lalith Munasinghe & Brendan O'Flaherty, 2005. "Specific Training Sometimes Cuts Wages and Always Cuts Turnover," Journal of Labor Economics, University of Chicago Press, vol. 23(2), pages 213-234, April.
    2. Bassanini, Andrea & Brunello, Giorgio, 2007. "Barriers to Entry, Deregulation and Workplace Training," IZA Discussion Papers 2746, Institute of Labor Economics (IZA).
    3. Daron Acemoglu & Jörn-Steffen Pischke, 1998. "Why Do Firms Train? Theory and Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 79-119.
    4. 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.
    5. William Robert Reed, 2015. "On the Practice of Lagging Variables to Avoid Simultaneity," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(6), pages 897-905, December.
    6. Katja Görlitz & Joel Stiebale, 2011. "The Impact of Product Market Competition on Employers’ Training Investments. Evidence from German Establishment Panel Data," De Economist, Springer, vol. 159(1), pages 1-23, March.
    7. 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, vol. 29(1), pages 153-193, January.
    8. Hodaka Morita, 2005. "Multi-skilling, Delegation and Continuous Process Improvement: A Comparative Analysis of US-Japanese Work Organizations," Economica, London School of Economics and Political Science, vol. 72(285), pages 69-93, February.
    9. Alan B. Krueger, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984–1989," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 33-60.
    10. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 3, chapter 11, pages 521-576, Elsevier.
    11. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    12. Derek C. Jones & Panu Kalmi & Antti Kauhanen, 2012. "The effects of general and firm-specific training on wages and performance: evidence from banking," Oxford Economic Papers, Oxford University Press, vol. 64(1), pages 151-175, January.
    13. Kornelius Kraft & Julia Lang, 2013. "Profit Sharing and Training," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 940-961, December.
    14. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, number 10142, April.
    15. 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.
    16. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1409-1448.
    17. Tat‐kei Lai & Travis Ng, 2014. "The impact of product market competition on training provision: Evidence from Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(3), pages 856-888, August.
    18. R. Sridhar & Anand Nayak, 2013. "Employment Relations," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 38(4), pages 411-423, November.
    19. Brunello, Giorgio & Garibaldi, Pietro & Wasmer, Etienne (ed.), 2007. "Education and Training in Europe," OUP Catalogue, Oxford University Press, number 9780199210978.
    20. Wallace J. Hopp & Eylem Tekin & Mark P. Van Oyen, 2004. "Benefits of Skill Chaining in Serial Production Lines with Cross-Trained Workers," Management Science, INFORMS, vol. 50(1), pages 83-98, January.
    21. Xavier Vives, 2008. "Innovation And Competitive Pressure," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 419-469, December.
    22. Edward P. Lazear, 2009. "Firm-Specific Human Capital: A Skill-Weights Approach," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 914-940, October.
    23. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
    24. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-562, October.
    25. Brunello, Giorgio & De Paola, Maria, 2008. "Training and economic density: Some evidence form Italian provinces," Labour Economics, Elsevier, vol. 15(1), pages 118-140, February.
    26. Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 445-464.
    27. Katz, Eliakim & Ziderman, Adrian, 1990. "Shared investment in general training : the role of information," Policy Research Working Paper Series 535, The World Bank.
    28. 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.
    29. Tatkei Lai & Travis Ng, 2014. "The impact of product market competition on training provision: Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 47(3), pages 856-888, August.
    30. Dan A. Black & Brett J. Noel & Zheng Wang, 1999. "On-the-Job Training, Establishment Size, and Firm Size: Evidence for Economies of Scale in the Production of Human Capital," Southern Economic Journal, John Wiley & Sons, vol. 66(1), pages 82-100, July.
    31. Greene, W., 2001. "Estimating Econometric Models with Fixed Effects," New York University, Leonard N. Stern School Finance Department Working Paper Seires 01-10, New York University, Leonard N. Stern School of Business-.
    32. 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.
    33. Katz, Eliakim & Ziderman, Adrian, 1990. "Investment in General Training: The Role of Information and Labour Mobility," Economic Journal, Royal Economic Society, vol. 100(403), pages 1147-1158, December.
    34. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bilanakos, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2018. "Does demand for product quality increase worker training?," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 159-177.
    2. Konstantinos Angelopoulos & Andrea Benecchi & James Malley, 2017. "Can subsidising job-related training reduce inequality?," Working Papers 2017_10, Business School - Economics, University of Glasgow.
    3. Bilanakosa, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2017. "Worker Training and Quality Competition," GLO Discussion Paper Series 137, Global Labor Organization (GLO).
    4. Tina Hinz & Jens Mohrenweiser, 2019. "Competition, Institutions and Company-sponsored Training," Economics of Education Working Paper Series 0162, University of Zurich, Department of Business Administration (IBW).
    5. Benjamin Artz & Colin P. Green & John S. Heywood, 2021. "Does performance pay increase alcohol and drug use?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 969-1002, July.
    6. Christos Bilanakos & John S. Heywood & John Sessions & Nikolaos Theodoropoulos, 2016. "Delegation and worker training," University of Cyprus Working Papers in Economics 06-2016, University of Cyprus Department of Economics.
    7. Konstantinos Angelopoulos & Andrea Benecchi & Jim Malley, 2017. "Can Subsidising Job-Related Training Reduce Inequality?," CESifo Working Paper Series 6605, CESifo.
    8. Benjamin Artz & Colin P. Green & John S. Heywood, 0. "Does performance pay increase alcohol and drug use?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 0, pages 1-34.
    9. Christos Bilanakos & John S. Heywood & John G. Sessions & Nikolaos Theodoropoulos, 2018. "Does Delegation Increase Worker Training?," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1089-1115, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John S Heywood & Uwe Jirjahn & Annika Pfister, 2020. "Product market competition and employer provided training in Germany [Technical change, inequality and the labor market]," Industrial and Corporate Change, Oxford University Press, vol. 29(2), pages 533-556.
    2. Bilanakosa, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2017. "Worker Training and Quality Competition," GLO Discussion Paper Series 137, Global Labor Organization (GLO).
    3. Bilanakos, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2018. "Does demand for product quality increase worker training?," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 159-177.
    4. Tina Hinz & Jens Mohrenweiser, 2019. "Competition, Institutions and Company-sponsored Training," Economics of Education Working Paper Series 0162, University of Zurich, Department of Business Administration (IBW).
    5. Christos Bilanakos & John S. Heywood & John G. Sessions & Nikolaos Theodoropoulos, 2018. "Does Delegation Increase Worker Training?," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1089-1115, April.
    6. Christos Bilanakos & John S. Heywood & John Sessions & Nikolaos Theodoropoulos, 2016. "Delegation and worker training," University of Cyprus Working Papers in Economics 06-2016, University of Cyprus Department of Economics.
    7. Caliendo, Marco & Cobb-Clark, Deborah A. & Seitz, Helke & Uhlendorff, Arne, 2016. "Locus of Control and Investment in Training," IZA Discussion Papers 10406, Institute of Labor Economics (IZA).
    8. Picchio, Matteo & van Ours, Jan C., 2011. "Market imperfections and firm-sponsored training," Labour Economics, Elsevier, vol. 18(5), pages 712-722, October.
    9. Giulio Pedrini, 2017. "Law and economics of training: a taxonomy of the main legal and institutional tools addressing suboptimal investments in human capital development," European Journal of Law and Economics, Springer, vol. 43(1), pages 83-105, February.
    10. Roshchin, S. & Travkin, P., 2015. "Job-Related Training on Russian Enterprises," Journal of the New Economic Association, New Economic Association, vol. 26(2), pages 150-171.
    11. Goerlitz, Katja, 2009. "The Development of Employers' Training Investments Over Time – A Decomposition Analysis Using German Establishment Data," Ruhr Economic Papers 87, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Rao, Neel, 2015. "General training in labor markets: Common value auctions with unobservable investment," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 19-45.
    13. By Barbara Mueller & Jürg Schweri, 2015. "How specific is apprenticeship training? Evidence from inter-firm and occupational mobility after graduation," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 1057-1077.
    14. Rita Asplund, 2005. "The Provision and Effects of Company Training: A Brief Review of the Literature," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 47-73.
    15. Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2018. "The Skills to Pay the Bills: Returns to On-the-job Soft Skills Training," NBER Working Papers 24313, National Bureau of Economic Research, Inc.
    16. Sauermann, Jan, 2006. "Who Invests in Training if Contracts are Temporary? - Empirical Evidence for Germany Using Selection Correction," IWH Discussion Papers 14/2006, Halle Institute for Economic Research (IWH).
    17. Francisca Bremberger & Rudolf Hochholzer & Peter Huber, 2016. "Labour turnover, employment density and employer provided training: Evidence from Vienna," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 2(1), pages 5-22.
    18. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    19. Didier Fouarge & Andries Grip & Wendy Smits & Robert Vries, 2012. "Flexible Contracts and Human Capital Investments," De Economist, Springer, vol. 160(2), pages 177-195, June.
    20. Bhaskar, V & Holden, Steinar, 2002. "Wage Differentiation via Subsidised General Training," Economics Discussion Papers 8851, University of Essex, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jemstr:v:26:y:2017:i:1:p:67-95. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.kellogg.northwestern.edu/research/journals/JEMS/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.kellogg.northwestern.edu/research/journals/JEMS/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.