Does increased international competition increase the need for training?
Pål Schøne ()
Applied Economics Letters, 2007, vol. 14, issue 2, 151-155
Both politicians and parties in the labour market have in recent years stressed the importance of work-related training. Globalization, an increased international competition, is often said to be one important factor determining the need for more work-related training. The relationship between increased international competition and more training has almost become a stylized fact. However, we argue that this relationship is not empirically well enough founded. Therefore, in this note we test this relationship by answering the following question: Is it true that firms operating in an international competitive arena invest more in training for their workers compared to firms not operating in an international competitive arena? Evidence from representative firm-level data suggests that the answer is yes. Manufacturing firms operating in an international competitive arena do invest more in training for their workers compared to firms not operating in an international competitive arena. A natural interpretation of this result is that these firms respond to demands from fierce international competition by skilling their workforce through training at work.
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