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Training and Innovation

Stefan Bauernschuster, Oliver Falck and Stephan Heblich
Journal of Human Capital
Vol. 3, No. 4 (Winter 2009), pp. 323-353
DOI: 10.1086/653713
Stable URL: http://www.jstor.org/stable/10.1086/653713
Page Count: 31
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Training and Innovation
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Abstract

Research analyzing the importance of human capital for innovation usually focuses on secondary and tertiary education. This paper takes a different perspective by focusing on in‐firm training. We argue that continuous training guarantees access to leading‐edge knowledge and thus increases a firm’s propensity to innovate. Using German establishment‐level data, we show a strong association between lagged continuous training and innovation. Applying instrumental variable methods, we cautiously argue that the association between training and innovation is indeed a causal effect. In the quest for a relevant and valid instrument, we exploit legal regulations of the German Works Constitution Act.

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