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Worker Training and Quality Competition

Author

Listed:
  • Bilanakosa, Christos
  • Heywood, John S.
  • Sessions, John
  • Theodoropoulos, Nikolaos

Abstract

We uniquely examine the relationship between firm-sponsored training and product quality competition. Using an oligopolistic model of both price and quality competition, we show that an increase in the sensitivity of demand to product quality will strengthen firms’ incentives to train their workforce. Cross section, panel and instrumental variable estimations confirm that British establishments provide more intensive training when their competitive position is more sensitive to product quality. A variety of robustness checks and changes in variable definitions leave this confirmation in place.

Suggested Citation

  • Bilanakosa, Christos & Heywood, John S. & Sessions, John & Theodoropoulos, Nikolaos, 2017. "Worker Training and Quality Competition," GLO Discussion Paper Series 137, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:137
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    More about this item

    Keywords

    Training; Product Quality; Demand Sensitivity; Competition;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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