Does demand for product quality increase worker training?
Heywood, John S.
SourceJournal of Economic Behavior & Organization
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We uniquely examine the relationship between firm-organized training and the sensitivity of consumer demand to product quality. Cross section, panel fixed effect and instrumental variable estimates confirm that British workplaces provide more intensive training when their product demand is more sensitive to product quality. Robustness checks including using alternative key variable definitions and a counterfactual analysis examining the importance of competing on price support this confirmation.