The impact of firm-provided training on production : testing for firm-size effects

The returns to firm-provided training depend on many differentfactors. Firm size is an important indicator of various of these factors, but recent research tends toneglect it. In this study thereturns to firm-provided training are estimated, taking account ofthree possible firm-sizeeffects: the HRM effect, selection effect and scale effect. Usingpanel data on 173 Dutch firms,support is found for the existence of the HRM effect: trainingsupport per working day (theaverage time a firm spends on setting up and coordinating a trainingprogram) has a positive influence on the returns to training. In the absence of training support, training has no effect on production. Since on average smaller firms provide less training support per working day, this implies that small firms benefit less from firm-provided trainingthan their larger counterparts.