The Impact of Product Market Competition on Training Provision: Evidence from Canada

While standard models of training focus on how the structure of the input market affects training provisions of firms, this paper investigates the relationship between product market competition and training provision. Using the longitudinal and nationally representative data from Statistics Canada's Workplace and Employee Survey, we find that increased competition is strongly associated with more training provision within workplace. We show that this association is unlikely to be driven by unobservable workplace heterogeneity, the specific measures used, and other relevant factors which can affect training provisions. To the extent that training is a significant source of human capital and industry competitiveness, our empirical results suggest increasing training is a significant channel through which competition raises productivity.