Capital Adjustment, Technology Vintages and Training: Role of capital investment spikes in firm's skill formation strategy

Mantej Pardesi, Frank Cörvers and Harald Pfeifer

No 249, Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW)

Abstract: We study how investment spikes in technologies and complementary infrastructure influence firms' hiring and training strategies. While prior work emphasizes how technologies reallocate skill demand, few focus on how firms acquire the required skills. Using linked employer-employee data on German establishments, we identify spikes by their technological composition and capital vintages. Event study estimates show that investment spikes in ICT and production line technologies lead to an upscaling effect raising employment by external hiring followed by training of young apprentices. Combining technologies with factories and plants induces firms to use apprenticeship training without an increase in external hiring. Incumbent workers are trained when investment spikes renew the vintage of firm's capital. Our findings support a vintage human capital framework in which technology adoption induces firms to gradually adjust workforce through hiring and training while preserving expertise of incumbent workers.

Keywords: investment spikes; technology adoption; technology vintages; training; skill formation (search for similar items in EconPapers)
JEL-codes: D22 J24 O33 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2025-09
New Economics Papers: this item is included in nep-ict, nep-lma and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0249_lhwpaper.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iso:educat:0249

Access Statistics for this paper

More papers in Economics of Education Working Paper Series from University of Zurich, Department of Business Administration (IBW) Contact information at EDIRC.
Bibliographic data for series maintained by Sara Brunner ().