Investment in job training : why are SMES lagging so much behind ?
This paper analyzes the link between firm size and investment in job training by employers. Using a large firm level data set across 99 developing countries, the analysis shows that a strong and positive correlation in investment in job training and firm size is a robust statistical finding both within and across countries with very different institutions and level of development. However, the findings do not support the view that this difference is mostly driven by market imperfections disproportionally affecting small and medium enterprises. Rather, the evidence is supportive of small and medium enterprises having a smaller expected return from the investment in job training than larger firms. Therefore, the findings call for caution when designing pro-small and medium enterprises policies fostering investment in on-the-job training.
|Date of creation:||01 Jul 2010|
|Date of revision:|
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- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009.
"Innovative Firms or Innovative Owners? Determinants of Innovation in Micro, Small, and Medium Enterprises,"
IZA Discussion Papers
3962, Institute for the Study of Labor (IZA).
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009. "Innovative firms or innovative owners ? determinants of innovation in micro, small, and medium enterprises," Policy Research Working Paper Series 4934, The World Bank.
- Hong Tan & Lopez-Acevedo, Gladys, 2003. "Mexico : in-firm training for the knowledge economy," Policy Research Working Paper Series 2957, The World Bank.
- Van Biesebroeck, Johannes, 2005. "Firm Size Matters: Growth and Productivity Growth in African Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 545-83, April.
- Ibarrarán, Pablo & Maffioli, Alessandro & Stucchi, Rodolfo, 2009. "SME Policy and Firms’ Productivity in Latin America," IZA Discussion Papers 4486, Institute for the Study of Labor (IZA).
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