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Who benefits from training and R&D: The firm or the workers? A study on panels of French and Swedish firms

  • Gérard Ballot


    (ERMES, Université Paris II,)

  • Fathi Fakhfakh

    (ERMES, Université Paris II,)

  • Erol Taymaz


    (Department of Economics, METU)

The present paper offers a novel study of the effects of intangible assets on wages and productivity. Training, R&D, and physical capital are all taken into account, and their joint effects examined. We use panels of firms in order to control for unobserved fixed effects and the potential endogeneity of training and R&D, and have been able to obtain data for two different countries, France and Sweden, in order to explore the effects of institutional or national specificity. The estimation of productivity and wage equations allows us to show how the benefits of investment in physical capital, R&D and training are shared between the firm and the workers. Although the workers obtain significant benefits, the study shows that the firm obtains the largest return on the investments it makes. This is true not only for physical capital and R&D, but also for training. It suggests that firms can rationally invest in training and that the issue of under-investment in training should be re-examined.

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Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0201.

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Length: 30 pages
Date of creation: Jan 2002
Date of revision: Jan 2002
Handle: RePEc:met:wpaper:0201
Contact details of provider: Postal: Ankara 06531
Phone: +90 (312) 210 2003
Fax: (312) 210 1244
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  1. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
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