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Does Product Market Competition Decrease Employers' Training Investments? – Evidence from German Establishment Panel Data

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  • Görlitz, Katja
  • Stiebale, Joel

Abstract

Using a large panel data set of German manufacturing establishments, this paper investigates the impact of competition on training incidence as well as on the number of trained workers. According to theory, one would expect a negative relationship between product market competition and firms' incentives to invest in employees' general skills (Gersbach and Schmutzler 2006). In our empirical analysis, product market competition is approximated by various measures of competition such as the Herfindahl Index, the number of firms at the 3-digit industry level and the price cost margin. After controlling for unobserved heterogeneity across industries and establishments, there is no significant effect of competition on training. This result is robust towards different samples, model specifications and estimation techniques.

Suggested Citation

  • Görlitz, Katja & Stiebale, Joel, 2008. "Does Product Market Competition Decrease Employers' Training Investments? – Evidence from German Establishment Panel Data," Ruhr Economic Papers 41, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:41
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    References listed on IDEAS

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    1. Alda, Holger & Dundler, Agnes & Müller, Dana & Spengler, Anja, 2006. "Aufbereitung eines Paneldatensatzes aus den Querschnittsdaten des IAB-Betriebspanels (Creating a panel dataset using cross-sectional data from the IAB Establishment Panel)," FDZ Datenreport. Documentation on Labour Market Data 200602_de, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    Citations

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    Cited by:

    1. Stefan Bender & Michael Fertig & Katja Görlitz & Martina Huber & Stefan Hummelsheim & Petra Knerr & Alexandra Schmucker & Helmut Schröder, 2010. "WeLL – Berufliche Weiterbildung als Bestandteil Lebenslangen Lernens – Bisherige Arbeiten und Perspektiven," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 20, 08.
    2. Picchio, Matteo & van Ours, Jan C., 2011. "Market imperfections and firm-sponsored training," Labour Economics, Elsevier, vol. 18(5), pages 712-722, October.
    3. Bender, Stefan & Fertig, Michael & Görlitz, Katja & Huber, Martina & Hummelsheim, Stefan & Knerr, Petra & Schmucker, Alexandra & Schröder, Helmut, 2010. "WeLL - berufliche Weiterbildung als Bestandteil lebenslangen Lernens: Bisherige Arbeiten und Perspektiven," RWI Materialien 61, RWI - Leibniz-Institut für Wirtschaftsforschung.
    4. repec:zbw:rwimat:061 is not listed on IDEAS
    5. Eichhorst, Werner & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "A Roadmap to Vocational Education and Training Systems Around the World," IZA Discussion Papers 7110, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Training; human capital; product market competition;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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