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

25 Pages Posted: 13 May 2008

See all articles by Katja Goerlitz

Katja Goerlitz

FU Berlin

Joel Stiebale

University of Nottingham; Nottingham University Business School; University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP); Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Date Written: March 2008

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.

Keywords: Training, human capital, product market competition

JEL Classification: J24, L22, D43, C23

Suggested Citation

Goerlitz, Katja and Stiebale, Joel, Does Product Market Competition Decrease Employers' Training Investments? - Evidence from German Establishment Panel Data (March 2008). Ruhr Economic Paper No. 41, Available at SSRN: https://ssrn.com/abstract=1132753 or http://dx.doi.org/10.2139/ssrn.1132753

Katja Goerlitz (Contact Author)

FU Berlin ( email )

Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany

Joel Stiebale

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany
+492018149261 (Phone)

HOME PAGE: http://www.rwi-essen.de\stiebale

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