Firm Location and the Creation and Utilization of Human Capital

Almazán, Andrés; Motta, Adolfo de; Titman, Sheridan

doi:10.3386/w10106

Cited by 49 publications

(51 citation statements)

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“…Overman and Puga (2010) extend this approach to derive the specific prediction that industries facing stronger idiosyncratic shocks will exhibit a greater tendency to agglomerate and that agglomeration will be associated with worker turnover. Matouschek and Robert-Nicoud (2005), Combes and Duranton (2006), and Almazan, de Motta, and Titman (2007) all consider the tension between the beneficial turnover considered by Marshall and the risks that firms and workers face that others -either their opposites or their rivals -will expropriate value created by specific investments. In particular, a firm may be reluctant to train its workers if this training would provoke either opportunism by its employees or poaching by its rivals.…”

Section: Literaturementioning

confidence: 99%

Marshallian labour market pooling: Evidence from Italy

Andini

Blasio

Duranton

et al. 2013

Regional Science and Urban Economics

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This paper employs a unique Italian data source to take a comprehensive approach to labour market pooling. It jointly considers many different aspects of the agglomeration -labour market relationship, including turnover, learning, matching, and hold up. It also considers labour market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labour market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labour pooling, labour poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labour market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms. Abstract: This paper employs a unique Italian data source to take a comprehensive approach to labor market pooling. It jointly considers many different aspects of the agglomeration -labor market relationship, including turnover, learning, matching, and hold up. It also considers labor market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labor market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labor pooling, labor poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labor market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian worker and firms.Key words: local labor markets, matching, turnover, learning, hold-up, agglomeration jel classification: r23, j60 * We are deeply indebted to the researchers in the Statistics Department of the Bank of Italy who helped us to phrase the questions included in the shiw and sisf special sections on local labor markets. Our sincere thanks as well go to

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Section: Literaturementioning

confidence: 99%

Marshallian labour market pooling: Evidence from Italy

Andini

Blasio

Duranton

et al. 2013

Regional Science and Urban Economics

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“…From the firms' perspective, while the merger always leads to greater ex post payoff from employee innovations, it can still reduce ex ante firm expected profits if its negative effects on employee incentives are sufficiently large. 1 We show that the two firms, under certain conditions, do not find it desirable to merge even if doing so provides the post-merger firm with the co-insurance benefit and a greater market power.…”

Section: Introductionmentioning

confidence: 99%

“…Matouschek and Robert-Nicoud (2005) show that the location decision of firms depends on whether the firm or the employee invests in human capital, and whether human capital investment is industry-specific or firm-specific. In Almazan et al (2007), geographical proximity promotes the development of a competitive labor market, and firms prefer to cluster when employees pay 2 See, among others, Gertner, Scharfstein and Stein (1994), Scharfstein and Stein (2000), Fulghieri and Hodrick (2006). For a review of this literature, see Stein (2003).…”

Section: Introductionmentioning

confidence: 99%

“…Similarly, Matouschek and Robert-Nicoud (2005) and Almazan, De Motta and Titman (2007) study the link between firm location and employee incentives to invest in human capital. Matouschek and Robert-Nicoud (2005) show that the location decision of firms depends on whether the firm or the employee invests in human capital, and whether human capital investment is industry-specific or firm-specific.…”

Section: Introductionmentioning

confidence: 99%

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Mergers, Spinoffs, and Employee Incentives

Fulghieri¹,

Sevilir

2011

Rev. Financ. Stud.

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This paper studies mergers between competing firms and shows that while such mergers reduce the level of product market competition, they may have an adverse effect on employee incentives. In industries where value creation depends on innovation and development of new products, mergers are likely to be inefficient even though they increase the market power of the post-merger firm. In such industries, a stand-alone structure where independent firms compete both in the product market and in the market for employee human capital leads to a greater profitability. Furthermore, our analysis shows that multidivisional firms can improve employee incentives and increase firm value by reducing firm size through a spin-off transaction although doing so reduces the benefits of operating an internal capital market within the firm.To be presented at the AFA 2010 meetings. We thank seminar participants at ESMT, Oxford University and University of Virginia for useful comments. All errors are our own.

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“…However, the model explicitly rules out firm-sponsored training. Matouschek and Robert-Nicoud (2005) and Almazan et al (2007) propose models in which firms choose a location depending on the financing of their employees' training, with isolation being the preferable choice if the firms bear a high share of the training costs. These theoretical approaches all point towards a negative relationship between local competition and firm-sponsored training activity, such as apprentice…”

Section: Poaching As a Regional Externalitymentioning

confidence: 99%

Apprentice Poaching in Regional Labor Markets

Stockinger

Zwick

2017

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Apprentice Poaching in Regional Labor Markets*Bastian Stockinger** (IAB Nuremberg)Thomas Zwick (University of Würzburg, ZEW Mannheim, ROA Maastricht)February 2017 AbstractA number of studies have found that firms provide less training if they are located in regions with strong labor market competition. This finding is usually interpreted as evidence of a higher risk of poaching in these regions. Yet, there is no direct evidence that regional competition is positively correlated with poaching. Building on a recently established approach to ex-post identify poaching of apprenticeship completers, our paper is the first to directly investigate the correlation between regional labor market competition and poaching. Using German administrative data, we find that competition indeed increases training establishments' probability of becoming poaching victims. However, poaching victims do not change their apprenticeship training activity in reaction to past poaching. Instead, our findings indicate that the lower training activity in competitive regions can be attributed to lower retention rates, a less adverse selection, and lower labor and hiring costs of apprenticeship completers hired from rivals.JEL Codes: J24, M51, M53, R23

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Firm Location and the Creation and Utilization of Human Capital

Cited by 49 publications

References 20 publications

Marshallian labour market pooling: Evidence from Italy

Marshallian labour market pooling: Evidence from Italy

Mergers, Spinoffs, and Employee Incentives

Apprentice Poaching in Regional Labor Markets

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