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The role of size in firms' training: evidence from Spain

  • Laia Castany
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    Purpose – The purpose of this paper is to analyse why small firms provide less training to their employees than their larger counterparts. The hypothesis is that large firms are endowed with certain firm characteristics that require more training and with some that allow them to obtain larger returns from this investment. Design/methodology/approach – The paper analyses the individual contribution of these characteristics to explain the gap between small and large firms in the probability of providing training and its extent using the Oaxaca-Blinder decomposition. Findings – Small firms face greater obstacles in accessing training and the main reasons for that are related to their technological activity and the geographic scope of the market in which they operate. Together, these variables explain about half of the training gap in both the participation and the quantity decisions. Practical implications – The limited access to training of small firms prevents them from becoming more competitive by using a tool that would permit a better adoption of new technology and access to foreign markets. Originality/value – The paper exploits the data on training expenditure and relates this investment with other firms' strategies, such as innovation or internationalization. It also suggests estimating this type of data by means of a two-part model.

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    Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

    Volume (Year): 31 (2010)
    Issue (Month): 5 (September)
    Pages: 563-584

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    Handle: RePEc:eme:ijmpps:v:31:y:2010:i:5:p:563-584
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    1. Salvador Barrios & Holger Goerg & Eric Strobl, 2003. "Explaining Firms' Export Behaviour: R&D, Spillovers and the Destination Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 475-496, 09.
    2. Omar LICANDRO & Reyes MAROTO & Luis A. PUCH, 2004. "Innovation, investment and productivity: evidence from Spanish firms," Economics Working Papers ECO2004/07, European University Institute.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Leung, S.F. & Yu, S., 1992. "On the Choice Between Sample Selection and Two-Part Models," RCER Working Papers 337, University of Rochester - Center for Economic Research (RCER).
    5. Carlos Peraita, 2005. "Firm-sponsored training in regulated labour markets: evidence from Spain," Applied Economics, Taylor & Francis Journals, vol. 37(16), pages 1885-1898.
    6. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    7. Guilkey, David K. & Murphy, James L., 1993. "Estimation and testing in the random effects probit model," Journal of Econometrics, Elsevier, vol. 59(3), pages 301-317, October.
    8. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    9. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-44, September.
    10. repec:iab:iabzaf:v:40:i:2/3:p:149-167 is not listed on IDEAS
    11. Lynch, Lisa M, 1993. "The Economics of Youth Training in the United States," Economic Journal, Royal Economic Society, vol. 103(420), pages 1292-302, September.
    12. Elena Huergo & Jordi Jaumandreu, 2004. "How Does Probability of Innovation Change with Firm Age?," Small Business Economics, Springer, vol. 22(3_4), pages 193-207, 04.
    13. Javier Gardeazabal & Aratza Ugidos, . "More on identification in detailed wage decompositions," Studies on the Spanish Economy 140, FEDEA.
    14. Oi, Walter Y, 1983. "Heterogeneous Firms and the Organization of Production," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 147-71, April.
    15. Schweri, Juerg & Mueller, Barbara, 2007. "Why has the share of training firms declined in Switzerland?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(2/3), pages 149-167.
    16. Cecilia Albert & Carlos García-Serrano & Virginia Hernanz, 2004. "Firm-provided training and temporary contracts," Spanish Economic Review, Springer, vol. 7(1), pages 67-88, January.
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