The Impact of Product Market Competition on Employers' Training Investments. Evidence from German Establishment Panel Data

According to different training theories the sign of the relationship between competition and training is ambiguous. Using a large panel data set of German manufacturing establishments, this paper investigates the impact of product market competition on training incidence and on the share of trained workers. In our empirical analysis, we use three indicators of product market competition which are the Herfindahl index, the number of firms at the 3-digit industry level and the price-cost margin. After controlling for unobserved heterogeneity, there is no statistically significant effect of product market competition on training.