Open Access

The human capital of firms and the formal training of workers

Asif M. Islam
Asif M. Islam
 and 
Roberta Gatti
Roberta Gatti
   | Dec 08, 2023
IZA Journal of Development and Migration's Cover Image
About this article
Previous Article
Next Article
Cite
Published Online: Dec 08, 2023
Page range: -
Accepted: Feb 21, 2023
DOI: https://doi.org/10.2478/izajodm-2023-0004
Keywords
© 2023 Asif M. Islam et al., published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

Firm offers formal training (% of firms)Note: Medium and large firms only. Survey weights used to calculate averages.
Firm offers formal training (% of firms)Note: Medium and large firms only. Survey weights used to calculate averages.

Figure 2

Percentage of workers received formal training (0 if no training)Note: Medium and large manufacturing firms only. Survey weights used to calculate averages.
Percentage of workers received formal training (0 if no training)Note: Medium and large manufacturing firms only. Survey weights used to calculate averages.

Figure 3

Percentage of permanent full-time employees with a university degreeNote: Medium and large firms only. Survey weights used to calculate averages.
Percentage of permanent full-time employees with a university degreeNote: Medium and large firms only. Survey weights used to calculate averages.

Figure 4

Overall Management ScoreNote: Medium and large firms only. Survey weights used to calculate averages.
Overall Management ScoreNote: Medium and large firms only. Survey weights used to calculate averages.

Figure 5

MENA over timeNote: Medium and large firms only. Survey weights used to calculate averages.
MENA over timeNote: Medium and large firms only. Survey weights used to calculate averages.

Figure 6

ECA over timeNote: Medium and large firms only. Survey weights used to calculate averages.
ECA over timeNote: Medium and large firms only. Survey weights used to calculate averages.

Robustness – Production Complexity and Competition

Outcome Variable Firm offers formal training Y/N Share of workers offered formal training (0 if no training)
Sample All Firms MENA 2013–2019 ECA 2013–2019 Manf. Firms MENA Manf. Firms (2013–2019) ECA Manf. Firms (2013–2019)
(1) (2) (3) (4) (5) (6)
Overall management score 0.274*** (0.054) 0.047 (0.108) 0.326*** (0.061) 0.170*** (0.049) 0.024 (0.097) 0.216*** (0.058)
Share of permanent full-time employees with a university degree (0 to 1) 0.237*** (0.058) 0.506*** (0.094) 0.178*** (0.065) 0.157*** (0.046) 0.294*** (0.075) 0.111** (0.054)
Firm Spent on R&D Y/N over last 3 years 0.099*** (0.033) 0.096 (0.080) 0.096*** (0.035) 0.060** (0.029) 0.053 (0.056) 0.058* (0.033)
Introduced New Product/Service Y/N 0.044* (0.026) 0.075 (0.049) 0.044 (0.029) 0.024 (0.019) 0.025 (0.026) 0.028 (0.022)
Introduced New Process Y/N 0.135*** (0.028) 0.219*** (0.066) 0.128*** (0.028) 0.034 (0.022) 0.050 (0.036) 0.031 (0.025)
No competitor (Y/N) (domestic) −0.054 (0.076) −0.222** (0.096) −0.035 (0.088) 0.047 (0.050) 0.014 (0.051) 0.049 (0.056)
1–2 competitors (Y/N) (domestic) −0.026 (0.028) −0.014 (0.063) −0.030 (0.032) −0.027 (0.022) −0.024 (0.035) −0.023 (0.026)
4–10 competitors (Y/N) (domestic) 0.044* (0.024) 0.088* (0.051) 0.039 (0.027) 0.000 (0.021) −0.010 (0.031) 0.003 (0.026)
Number of observations 6,494 2,051 4,443 4,336 1,544 2,792
Control Variables YES YES YES YES YES YES
Country Fixed Effects YES YES YES YES YES YES
Sector (ISIC 2 DIGIT) Fixed Effects YES YES YES YES YES YES
Year Fixed effects YES YES YES YES YES YES
Adjusted R2 0.277 0.352 0.271 0.243 0.303 0.233

Summary Statistics - MENA 2013–2019 (pooled cross-section)

Variable Obs. Mean Std. Dev. Min. Max.
Firm offers formal training Y/N 2,554 0.243 0.429 0 1
Share of workers offered formal training (0 if no training) 1,988 0.090 0.235 0 1
Overall management score 2,554 0.486 0.199 0 1
MG1 Action when problem in the production/service provision arose 2,554 0.602 0.334 0 1
MG2 Number of production or service provision performance indicators monitored 2,554 0.360 0.336 0 1
MG3 Level of ease or difficulty to achieve targets 2,554 0.551 0.369 0 1
MG4 Personnel's knowledge of production or service provision targets 2,554 0.260 0.334 0 1
MG5 What managers’ performance bonuses were usually based on 2,554 0.560 0.428 0 1
MG6 Focus of production targets 2,554 0.569 0.378 0 1
MG7 Basis for promoting non-mangers 2,554 0.693 0.399 0 1
MG8 When underperforming managers were dismissed or reassigned 2,554 0.293 0.395 0 1
Share of permanent full-time employees with a university degree (0 to 1) 2,554 0.255 0.220 0 1
Train: Numeracy or math skills 1,489 0.0004 0.021 0 1
Train: Problem solving or critical thinking skills 1,489 0.0003 0.016 0 1
Train: Foreign language skills 1,489 0.001 0.028 0 1
Train: Managerial and leadership skills 1,489 0.009 0.097 0 1
Train: Interpersonal and communication skills 1,489 0.016 0.127 0 1
Train: Job-specific technical skills 1,489 0.251 0.434 0 1
Top manager experience in sector (years) 2,554 24.341 11.647 1 60
Log of age of firm 2,554 2.990 0.733 0 5.050
Proportion of permanent full-time workers that are female 2,472 0.253 0.274 0 1
Proportion of temporary workers (out of all workers) 2,554 0.038 0.097 0 0.826
Log of size 2,554 3.845 0.824 1.897 7.601
Senior management time spent in dealing with requirements of government regulations (%) 2,554 10.023 23.423 0 100
Average number of visits or required meetings with tax officials 2,554 0.943 1.326 0 13
Firm purchased fixed assets Y/N 2,554 0.317 0.465 0 1
Direct exports 10% or more of sales Y/N 2,554 0.334 0.472 0 1
Foreign ownership Y/N 2,554 0.067 0.249 0 1
Female top manager Y/N 2,554 0.058 0.234 0 1
Establishment has checking or savings account Y/N 2,554 0.926 0.262 0 1
ISO Certification Ownership Y/N 2,554 0.262 0.440 0 1
Website Y/N 2,554 0.662 0.473 0 1
Firm identifying inadequately educated workforce as a major or severe constraint 2,554 0.220 0.414 0 1
Firm identifying labor regulations as a major or severe constraint Y/N 2,554 0.105 0.306 0 1
Share of High-Skilled Production Workers (manf only) 1,953 0.369 0.269 0 1
Inadequately Educated Workforce (cell average) 2,539 0.205 0.196 0 1
Labor Regulations obstacle (cell average) 2,539 0.093 0.124 0 1
Competes against unregistered firms Y/N 2,554 0.454 0.498 0 1
Firm Spent on R&D Y/N over last 3 years 2,548 0.112 0.316 0 1
Introduced New Product/Service Y/N 2,549 0.223 0.416 0 1
Introduced New Process Y/N 2,540 0.171 0.377 0 1
No competitor (Y/N) (domestic) 2,068 0.022 0.146 0 1
1–2 competitors (Y/N) (domestic) 2,068 0.107 0.309 0 1
4–10 competitors (Y/N) (domestic) 2,068 0.233 0.423 0 1
Bribery Incidence (Y/N) 1,763 0.135 0.342 0 1
Financial Records (Y/N) 2,552 0.299 0.458 0 1
Manufacturing Sector Y/N 2,554 0.681 0.466 0 1

Summary Statistics - ECA 2013–2019 (pooled cross-section)

Variable Obs. Mean Std. Dev. Min. Max.
Firm offers formal training Y/N 5,916 0.427 0.495 0 1
Share of workers offered formal training (0 if no training) 4,000 0.190 0.328 0 1
Overall management score 5,916 0.529 0.196 0 1
MG1 Action when problem in the production/service provision arose 5,916 0.697 0.277 0 1
MG2 Number of production or service provision performance indicators monitored 5,916 0.444 0.331 0 1
MG3 Level of ease or difficulty to achieve targets 5,916 0.587 0.349 0 1
MG4 Personnel's knowledge of production or service provision targets 5,916 0.383 0.389 0 1
MG5 What managers’ performance bonuses were usually based on 5,916 0.388 0.392 0 1
MG6 Focus of production targets 5,916 0.610 0.378 0 1
MG7 Basis for promoting non-mangers 5,916 0.706 0.417 0 1
MG8 When underperforming managers were dismissed or reassigned 5,916 0.414 0.462 0 1
Share of permanent full-time employees with a university degree (0 to 1) 5,916 0.251 0.239 0 1
Train: Numeracy or math skills 4,658 0.009 0.093 0 1
Train: Problem solving or critical thinking skills 4,658 0.019 0.136 0 1
Train: Foreign language skills 4,658 0.015 0.122 0 1
Train: Managerial and leadership skills 4,658 0.041 0.198 0 1
Train: Interpersonal and communication skills 4,658 0.041 0.199 0 1
Train: Job-specific technical skills 4,658 0.286 0.452 0 1
Top manager experience in sector (years) 5,916 19.989 10.657 1 60
Log of age of firm 5,916 2.771 0.646 0 5.030
Proportion of permanent full-time workers that are female 5,718 0.370 0.288 0 1
Proportion of temporary workers (out of all workers) 5,916 0.030 0.091 0 0.929
Log of size 5,916 3.909 0.870 1.099 8.006
Senior management time spent in dealing with requirements of government regulations (%) 5,916 10.714 14.931 0 100
Average number of visits or required meetings with tax officials 5,916 1.285 2.359 0 30
Firm purchased fixed assets Y/N 5,916 0.565 0.496 0 1
Direct exports 10% or more of sales Y/N 5,916 0.313 0.464 0 1
Foreign ownership Y/N 5,916 0.137 0.344 0 1
Female top manager Y/N 5,916 0.157 0.363 0 1
Establishment has checking or savings account Y/N 5,916 0.970 0.170 0 1
ISO Certification Ownership Y/N 5,916 0.377 0.485 0 1
Website Y/N 5,916 0.744 0.437 0 1
Firm identifying inadequately educated workforce as a major or severe constraint 5,916 0.264 0.441 0 1
Firm identifying labor regulations as a major or severe constraint Y/N 5,916 0.079 0.269 0 1
Share of High-Skilled Production Workers (manf only) 3,954 0.401 0.300 0 1
Inadequately Educated Workforce (cell average) 5,889 0.238 0.189 0 1
Labor Regulations obstacle (cell average) 5,889 0.081 0.120 0 1
Competes against unregistered firms Y/N 5,916 0.328 0.470 0 1
Firm Spent on R&D Y/N over last 3 years 5,910 0.168 0.374 0 1
Introduced New Product/Service Y/N 5,895 0.379 0.485 0 1
Introduced New Process Y/N 5,871 0.279 0.449 0 1
No competitor (Y/N) (domestic) 4,488 0.040 0.197 0 1
1–2 competitors (Y/N) (domestic) 4,488 0.166 0.372 0 1
4–10 competitors (Y/N) (domestic) 4,488 0.351 0.477 0 1
Manufacturing Sector Y/N 5,916 0.540 0.498 0 1

Characteristics of Training Firms

MENA2013 MENA2019 ECA2013 ECA2019
Training Firms Non-Trainers Training Firms Non-Trainers Training Firms Non-Trainers Training Firms Non-Trainers
Small Firms (%) 37 68 44 71 54 69 57 73
Medium Firms (%) 40 27 42 24 33 27 31 23
Large Firms (%) 23 5 14 5 13 5 12 4
Young Firms (5 years or less) 9 18 7 7 12 14 11 13
Manufacturing firms (%) 37 43 29 37 25 32 27 28
Exporter (%) 29 21 23 17 17 14 19 15
Foreign Owned (%) 11 6 12 6 12 6 10 6
Female Top Manager (%) 5 5 6 5 19 19 19 20
Female Owner (%) 36 26 24 15 35 32 32 31

Summary Statistics - ECA Panel Sample

Variable Obs. Mean Std. Dev. Min. Max.
Firm offers formal training Y/N 1254 0.423 0.494 0 1
Share of workers offered formal training (0 if no training) 827 0.230 0.354 0 1
Overall management score 1254 0.516 0.191 0 0.958
MG1 Action when problem in the production/service provision arose 1254 0.684 0.262 0 1
MG2 Number of production or service provision performance indicators monitored 1254 0.423 0.325 0 1
MG3 Level of ease or difficulty to achieve targets 1254 0.572 0.353 0 1
MG4 Personnel's knowledge of production or service provision targets 1254 0.352 0.370 0 1
MG5 What managers’ performance bonuses were usually based on 1254 0.411 0.394 0 1
MG6 Focus of production targets 1254 0.578 0.365 0 1
MG7 Basis for promoting non-mangers 1254 0.697 0.416 0 1
MG8 When underperforming managers were dismissed or reassigned 1254 0.408 0.460 0 1
Share of permanent full-time employees with a university degree (0 to 1) 1254 0.244 0.227 0 1
Top manager experience in sector (years) 1254 21.179 11.000 1 60
Log of age of firm 1254 2.889 0.625 0.000 5.030
Proportion of permanent full-time workers that are female 1209 0.384 0.296 0 1
Proportion of temporary workers (out of all workers) 1254 0.023 0.079 0 0.882
Log of size 1254 4.197 0.993 1.099 8.006
Senior management time spent in dealing with requirements of government regulations (%) 1254 12.089 16.738 0 100
Average number of visits or required meetings with tax officials 1254 1.275 2.493 0 30
Firm purchased fixed assets Y/N 1254 0.511 0.500 0 1
Direct exports 10% or more of sales Y/N 1254 0.292 0.455 0 1
Foreign ownership Y/N 1254 0.093 0.291 0 1
Female top manager Y/N 1254 0.143 0.350 0 1
Establishment has checking or savings account Y/N 1254 0.960 0.196 0 1
ISO Certification Ownership Y/N 1254 0.410 0.492 0 1
Website Y/N 1254 0.774 0.418 0 1
Firm identifying inadequately educated workforce as a major or severe constraint 1254 0.253 0.435 0 1
Firm identifying labor regulations as a major or severe constraint Y/N 1254 0.084 0.277 0 1
Share of High-Skilled Production Workers (manf only) 817 0.433 0.287 0 1
Inadequately Educated Workforce (cell average) 1247 0.230 0.192 0 1
Labor Regulations obstacle (cell average) 1248 0.086 0.141 0 1
Competes against unregistered firms Y/N 1254 0.359 0.480 0 1
Manufacturing Sector Y/N 1254 0.683 0.466 0 1

Determinants of Formal Training - MENA Panel Estimations

Model Firm and Year Fixed Effects
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample MENA 2013–2019 MENA 2013–2019 Manf. Firms MENA 2013–2019 MENA 2013–2019 Manf. Firms
(1) (2) (3) (4)
Share of permanent full-time employees with a university degree (0 to 1) 0.373*** (0.074) 0.258*** (0.072) 0.419*** (0.121) 0.234*** (0.089)
Overall management score 0.059 (0.291) 0.109 (0.114)
MG1 Action when problem in the production/service provision arose 0.222** (0.102) 0.017 (0.057)
MG2 Number of production or service provision performance indicators monitored 0.189 (0.124) 0.033 (0.046)
MG3 Level of ease or difficulty to achieve targets −0.125 (0.096) −0.075 (0.092)
MG4 Personnel's knowledge of production or service provision targets 0.026 (0.150) 0.150* (0.087)
MG5 What managers’ performance bonuses were usually based on −0.086 (0.085) −0.078 (0.071)
MG6 Focus of production targets −0.073 (0.226) 0.062 (0.101)
MG7 Basis for promoting non-mangers 0.147 (0.177) 0.144 (0.106)
MG8 When underperforming managers were dismissed or reassigned −0.166** (0.083) −0.091* (0.048)
Control Variables YES YES YES YES
Firm Fixed Effects YES YES YES YES
Year Fixed Effects YES YES YES YES
Number of observations 554 395 554 395
Adjusted R2 0.249 0.212 0.311 0.289

Summary Statistics - Full Sample

Variable Obs. Mean Std. Dev. Min. Max.
Firm offers formal training Y/N 8,470 0.393 0.488 0 1
Share of workers offered formal training (0 if no training) 5,988 0.167 0.312 0 1
Overall management score 8,470 0.521 0.197 0 1
MG1 Action when problem in the production/service provision arose 8,470 0.679 0.291 0 1
MG2 Number of production or service provision performance indicators monitored 8,470 0.429 0.334 0 1
MG3 Level of ease or difficulty to achieve targets 8,470 0.581 0.353 0 1
MG4 Personnel's knowledge of production or service provision targets 8,470 0.360 0.382 0 1
MG5 What managers’ performance bonuses were usually based on 8,470 0.420 0.404 0 1
MG6 Focus of production targets 8,470 0.603 0.378 0 1
MG7 Basis for promoting non-mangers 8,470 0.704 0.414 0 1
MG8 When underperforming managers were dismissed or reassigned 8,470 0.391 0.453 0 1
Share of permanent full-time employees with a university degree (0 to 1) 8,470 0.252 0.236 0 1
Train: Numeracy or math skills 6,147 0.007 0.085 0 1
Train: Problem solving or critical thinking skills 6,147 0.016 0.125 0 1
Train: Foreign language skills 6,147 0.013 0.112 0 1
Train: Managerial and leadership skills 6,147 0.036 0.186 0 1
Train: Interpersonal and communication skills 6,147 0.037 0.190 0 1
Train: Job-specific technical skills 6,147 0.280 0.449 0 1
Top manager experience in sector (years) 8,470 20.795 10.977 1 60
Log of age of firm 8,470 2.811 0.668 0 5.050
Proportion of permanent full-time workers that are female 8,190 0.349 0.289 0 1
Proportion of temporary workers (out of all workers) 8,470 0.031 0.092 0 0.929
Log of size 8,470 3.897 0.862 1.099 8.006
Senior management time spent in dealing with requirements of government regulations (%) 8,470 10.586 16.830 0 100
Average number of visits or required meetings with tax officials 8,470 1.222 2.209 0 30
Firm purchased fixed assets Y/N 8,470 0.519 0.500 0 1
Direct exports 10% or more of sales Y/N 8,470 0.316 0.465 0 1
Foreign ownership Y/N 8,470 0.124 0.329 0 1
Female top manager Y/N 8,470 0.138 0.345 0 1
Establishment has checking or savings account Y/N 8,470 0.962 0.191 0 1
ISO Certification Ownership Y/N 8,470 0.356 0.479 0 1
Website Y/N 8,470 0.729 0.445 0 1
Firm identifying inadequately educated workforce as a major or severe constraint 8,470 0.256 0.436 0 1
Firm identifying labor regulations as a major or severe constraint Y/N 8,470 0.083 0.277 0 1
Share of High-Skilled Production Workers (manf only) 5,907 0.393 0.294 0 1
Inadequately Educated Workforce (cell average) 8,428 0.232 0.191 0 1
Labor Regulations obstacle (cell average) 8,428 0.083 0.121 0 1
Competes against unregistered firms Y/N 8,470 0.351 0.477 0 1
Firm Spent on R&D Y/N over last 3 years 8,458 0.158 0.364 0 1
Introduced New Product/Service Y/N 8,444 0.350 0.477 0 1
Introduced New Process Y/N 8,411 0.259 0.438 0 1
No competitor (Y/N) (domestic) 6,556 0.037 0.188 0 1
1–2 competitors (Y/N) (domestic) 6,556 0.154 0.361 0 1
4–10 competitors (Y/N) (domestic) 6,556 0.328 0.470 0 1
Manufacturing Sector Y/N 8,470 0.566 0.496 0 1

Summary Statistics - MENA Panel Sample

Variable Obs. Mean Std. Dev. Min. Max.
Firm offers formal training Y/N 554 0.253 0.435 0 1
Share of workers offered formal training (0 if no training) 395 0.090 0.218 0 1
Overall management score 554 0.494 0.199 0 1
MG1 Action when problem in the production/service provision arose 554 0.639 0.304 0 1
MG2 Number of production or service provision performance indicators monitored 554 0.345 0.337 0 1
MG3 Level of ease or difficulty to achieve targets 554 0.560 0.383 0 1
MG4 Personnel's knowledge of production or service provision targets 554 0.268 0.339 0 1
MG5 What managers’ performance bonuses were usually based on 554 0.554 0.430 0 1
MG6 Focus of production targets 554 0.559 0.390 0 1
MG7 Basis for promoting non-mangers 554 0.741 0.383 0 1
MG8 When underperforming managers were dismissed or reassigned 554 0.289 0.415 0 1
Share of permanent full-time employees with a university degree (0 to 1) 554 0.280 0.238 0 1
Top manager experience in sector (years) 554 24.134 11.579 1 60
Log of age of firm 554 3.086 0.686 0.693 5.050
Proportion of permanent full-time workers that are female 529 0.240 0.285 0 1
Proportion of temporary workers (out of all workers) 554 0.037 0.088 0 0.669
Log of size 554 4.278 1.044 2.303 7.601
Senior management time spent in dealing with requirements of government regulations (%) 554 7.964 21.105 0 100
Average number of visits or required meetings with tax officials 554 1.204 1.722 0 13
Firm purchased fixed assets Y/N 554 0.312 0.464 0 1
Direct exports 10% or more of sales Y/N 554 0.336 0.473 0 1
Foreign ownership Y/N 554 0.083 0.276 0 1
Female top manager Y/N 554 0.038 0.191 0 1
Establishment has checking or savings account Y/N 554 0.904 0.294 0 1
ISO Certification Ownership Y/N 554 0.336 0.473 0 1
Website Y/N 554 0.657 0.475 0 1
Firm identifying inadequately educated workforce as a major or severe constraint 554 0.181 0.385 0 1
Firm identifying labor regulations as a major or severe constraint Y/N 554 0.079 0.271 0 1
Share of High-Skilled Production Workers (manf only) 392 0.371 0.273 0 1
Inadequately Educated Workforce (cell average) 544 0.182 0.179 0 1
Labor Regulations obstacle (cell average) 544 0.094 0.121 0 1
Competes against unregistered firms Y/N 554 0.478 0.500 0 1
Manufacturing Sector Y/N 554 0.729 0.445 0 1

Management Practices and Formal Training in MENA by Level of Corruption and Financial Record Keeping

Model OLS
Outcome Variable Firm offers formal training Y/N
Sample MENA 2013–2019
Bribery Incidence Financial Records
Yes No Yes No
(1) (2) (3) (4)
Overall management score −0.147 (0.306) 0.216** (0.102) 0.339** (0.134) −0.002 (0.136)
Share of permanent full-time employees with a university degree (0 to 1) 0.081 (0.310) 0.478*** (0.131) 0.543*** (0.129) 0.472*** (0.122)
Number of observations 198 1,565 832 1,720
Controls YES YES YES YES
Country Fixed Effects YES YES YES YES
Year Fixed effects YES YES YES YES
Adjusted R2 0.570 0.277 0.316 0.249

Determinants of Formal Training - ECA Panel Estimations

Model Firm and Year Fixed Effects
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample ECA 2013–2019 ECA 2013–2019 Manf. Firms ECA 2013–2019 ECA 2013–2019Manf. Firms
(1) (2) (3) (4)
Share of permanent full-time employees with a university degree (0 to 1) 0.084 (0.469) −0.499** (0.210) 0.039 (0.450) −0.448** (0.199)
Overall management score 0.325* (0.193) 0.595*** (0.123)
MG1 Action when problem in the production/service provision arose 0.274** (0.115) 0.120 (0.130)
MG2 Number of production or service provision performance indicators monitored 0.203 (0.155) 0.062 (0.117)
MG3 Level of ease or difficulty to achieve targets 0.091 (0.086) 0.120 (0.115)
MG4 Personnel's knowledge of production or service provision targets 0.219* (0.112) 0.170** (0.075)
MG5 What managers’ performance bonuses were usually based on 0.035 (0.106) −0.030 (0.088)
MG6 Focus of production targets 0.027 (0.107) 0.190* (0.103)
MG7 Basis for promoting non-mangers −0.180* (0.103) −0.121* (0.071)
MG8 When underperforming managers were dismissed or reassigned −0.040 (0.071) 0.108* (0.065)
Control Variables YES YES YES YES
Firm Fixed Effects YES YES YES YES
Year Fixed Effects YES YES YES YES
Number of observations 1,254 827 1,254 827
Adjusted R2 0.197 0.240 0.277 0.345

Management Practices Scoring

MG1 Problem resolution (r1) Score
Action when problem in the production/service provision arose
Most structured: We fixed it and took action to make sure that it did not happen again, and had a continuous improvement process to anticipate problems like these in advance 1
Second most structured: We fixed it and took action to make sure it did not happen again 0.667
Second least structured: We fixed it but did not take further action 0.333
Least structured: No action was taken 0
MG2 Number of performance indicators monitored (r3) Score
Number of production or service provision performance indicators monitored
10 or more indicators 1
3–9 indicators 0.667
1–2 indicators 0.333
No indicators 0
MG6 Length of focus of production targets Score
Focus of production targets
Combination of short-term and long-term targets 1
long-term only 0.667
short-term only 0.333
No targets or targets not achieved 0
MG3 Level of ease or difficulty to achieve production or service provision targets (r6) Score
Level of ease or difficulty to achieve targets
No targets or targets not achieved 0
Achieved without much effort 0.2
Only achieved with extraordinary effort 0.4
Achieved with some effort 0.6
Achieved with normal amount of effort 0.8
Achieved with more than normal effort 1
MG4 Knowledge of production or service provision targets (r7) Score
Personnel's knowledge of production or service provision targets
All managers and most workers 1
Most managers and most workers 0.667
Most managers and some workers 0.333
Only senior managers 0
No targets 0
MG5 Basis of bonuses (r9) Score
What managers’ performance bonuses were usually based on
Their own performance as measured by targets 1
Their team or shift performance as measured by targets 0.75
Their establishment's performance as measured by targets 0.5
Their company's performance as measured by targets 0.25
No performance bonuses 0
MG7 Promotion of non-mangers Score
Basis for promoting non-mangers
Based solely on performance and ability 1
Based partly on performance and ability, and partly on other factors (for example, tenure or family connections) 0.667
Based mainly on factors other than performance and ability (for example, tenure or family connections) 0.333
Non-managers are normally not promoted 0
MG8 Dismissal Score
When underperforming managers were dismissed or reassigned
Within 6 months of underperformance 1
After 6 months 0.5
Rarely or never 0

Determinants of Formal Training - Type of Management Score

Model OLS
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample All Firms MENA 2013–2019 ECA 2013–2019 Manf. Firms MENA Manf. Firms (2013–2019) ECA Manf. Firms (2013–2019)
(1) (2) (3) (4) (5) (6)
Share of permanent full-time employees with a university degree (0 to 1) 0.253*** (0.051) 0.479*** (0.094) 0.190*** (0.057) 0.158*** (0.044) 0.317*** (0.080) 0.098* (0.052)
MG1 Action when problem in the production/service provision arose 0.030 (0.035) −0.012 (0.066) 0.059 (0.041) 0.028 (0.033) 0.006 (0.049) 0.039 (0.042)
MG2 Number of production or service provision performance indicators monitored 0.117*** (0.034) 0.137** (0.063) 0.118*** (0.038) 0.084*** (0.026) 0.053 (0.043) 0.099*** (0.030)
MG3 Level of ease or difficulty to achieve targets 0.001 (0.034) −0.072 (0.058) 0.017 (0.040) 0.007 (0.025) −0.033 (0.044) 0.017 (0.029)
MG4 Personnel's knowledge of production or service provision targets 0.124*** (0.028) 0.018 (0.058) 0.127*** (0.031) 0.092*** (0.022) 0.007 (0.046) 0.104*** (0.025)
MG5 What managers’ performance bonuses were usually based on 0.054** (0.027) 0.003 (0.044) 0.073** (0.031) 0.009 (0.021) −0.027 (0.029) 0.025 (0.025)
MG6 Focus of production targets −0.020 (0.032) −0.000 (0.073) −0.016 (0.035) −0.032 (0.028) −0.030 (0.040) −0.026 (0.032)
MG7 Basis for promoting non-mangers 0.025 (0.026) 0.024 (0.045) 0.027 (0.029) −0.024 (0.021) 0.018 (0.032) −0.042 (0.025)
MG8 When underperforming managers were dismissed or reassigned 0.053** (0.022) −0.051 (0.043) 0.064*** (0.024) 0.025 (0.019) −0.029 (0.022) 0.036 (0.022)
Controls YES YES YES YES YES YES
Country Fixed Effects YES YES YES YES YES YES
Year Fixed effects YES YES YES YES YES YES
Number of observations 8,470 2,554 5,916 5,988 1,988 4,000
Adjusted R2 0.217 0.253 0.208 0.179 0.193 0.173

Robustness - Accounting for Skills

Model OLS - Country and Year Fixed Effects Firm and Year Fixed Effects OLS - Country and Year Fixed Effects Firm and Year Fixed Effects
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample Sector Manf. Manf. Manf. Manf. Manf. Manf. Manf. Manf.
Sample MENA Firms - Pooled Cross section MENA Firms - Panel ECA Firms - Pooled Cross section ECA Firms - Panel
(1) (2) (3) (4) (5) (6) (7) (8)
Share of permanent full-time employees with a university degree (0 to 1) 0.443*** (0.127) 0.324*** (0.088) 0.348*** (0.099) 0.362*** (0.115) 0.102 (0.070) 0.103* (0.054) −0.386 (0.430) −0.573** (0.236)
Overall management score 0.117 (0.133) −0.017 (0.084) −0.361 (0.302) −0.118 (0.226) 0.463*** (0.072) 0.215*** (0.050) 0.694*** (0.246) 0.584*** (0.128)
Share of High-Skilled Production Workers (manf only) 0.075 (0.077) 0.109** (0.052) 0.056 (0.141) 0.212* (0.112) −0.076 (0.056) −0.023 (0.041) −0.097 (0.152) −0.019 (0.139)
Control Variables YES YES YES YES YES YES YES YES
Country Fixed Effects YES YES NO NO YES YES NO NO
Firm Fixed Effects NO NO YES YES NO NO YES YES
Year Fixed Effects YES YES YES YES YES YES YES YES
Number of observations 1,953 1,902 392 376 3,954 3,835 817 787
Adjusted R2 0.238 0.199 0.299 0.252 0.218 0.155 0.301 0.236

Sample Composition

Economy No. of Firms Economy No. of Firms
Albania 113 Lithuania 143
Armenia 134 Moldova 102
Azerbaijan 71 Montenegro 49
Belarus 238 Morocco 206
Bosnia and Herzegovina 141 North Macedonia 175
Bulgaria 134 Poland 189
Croatia 242 Romania 262
Czech Republic 223 Russian Federation 552
Egypt, Arab Rep. 1,506 Serbia 125
Estonia 96 Slovak Republic 169
Georgia 109 Slovenia 188
Hungary 287 Tajikistan 70
Jordan 179 Tunisia 357
Kazakhstan 356 Turkey 664
Kosovo 60 Ukraine 459
Kyrgyz Republic 170 Uzbekistan 264
Latvia 131 West Bank and Gaza 91
Lebanon 215

Robustness - Gender Composition of Workforce

Model OLS - Country and Year Fixed Effects Firm and Year Fixed Effects OLS - Country and Year Fixed Effects Firm and Year Fixed Effects
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample Sector All Manf. All Manf. All Manf. All Manf.
Sample MENA Firms - Pooled Cross section MENA Firms - Panel ECA Firms - Pooled Cross section ECA Firms - Panel
(1) (2) (3) (4) (5) (6) (7) (8)
Share of permanent full-time employees with a university degree (0 to 1) 0.539*** (0.097) 0.346*** (0.079) 0.278* (0.166) 0.235** (0.107) 0.189*** (0.057) 0.095* (0.051) 0.051 (0.486) −0.478** (0.218)
Overall management score 0.063 (0.100) −0.037 (0.082) −0.076 (0.262) 0.017 (0.073) 0.475*** (0.053) 0.236*** (0.049) 0.318 (0.203) 0.527*** (0.131)
Proportion of permanent full-time workers that are female 0.099 (0.068) 0.001 (0.047) 0.177*** (0.062) 0.184** (0.080) −0.059 (0.037) −0.063** (0.032) −0.501** (0.196) −0.290*** (0.102)
Control Variables YES YES YES YES YES YES YES YES
Country Fixed Effects YES YES NO NO YES YES NO NO
Firm Fixed Effects NO NO YES YES NO NO YES YES
Year Fixed Effects YES YES YES YES YES YES YES YES
Number of observations 2,472 1,955 529 385 5,718 3,901 1,209 804
Adjusted R2 0.257 0.197 0.267 0.240 0.210 0.160 0.260 0.271

Robustness - Regulation and Perceptions

Model OLS - Country and Year Fixed Effects Firm and Year Fixed Effects OLS - Country and Year Fixed Effects Firm and Year Fixed Effects
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training) Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample Sector All Manf. All Manf. All Manf. All Manf.
Sample MENA Firms - Pooled Cross section MENA Firms - Panel ECA Firms - Pooled Cross section ECA Firms - Panel
(1) (2) (3) (4) (5) (6) (7) (8)
Share of permanent full-time employees with a university degree (0 to 1) 0.466*** (0.095) 0.300*** (0.077) 0.239*** (0.081) 0.227*** (0.067) 0.186*** (0.057) 0.104** (0.051) 0.014 (0.522) −0.531** (0.207)
Overall management score 0.085 (0.103) −0.050 (0.078) 0.172 (0.251) 0.124 (0.112) 0.460*** (0.054) 0.244*** (0.050) 0.466** (0.206) 0.710*** (0.169)
Inadequately Educated Workforce (cell average) 0.048 (0.148) −0.366** (0.148) −0.049 (0.342) −0.015 (0.223) 0.094 (0.060) −0.014 (0.072) 0.053 (0.169) −0.150 (0.218)
Labor Regulations obstacle (cell average) 0.287* (0.156) 0.149 (0.095) 0.322 (0.393) −0.063 (0.106) 0.100 (0.093) 0.154* (0.082) 1.198*** (0.399) 0.890*** (0.317)
Control Variables YES YES YES YES YES YES YES YES
Country Fixed Effects YES YES NO NO YES YES NO NO
Firm Fixed Effects NO NO YES YES NO NO YES YES
Year Fixed Effects YES YES YES YES YES YES YES YES
Number of observations 2,616 2,043 552 401 5,943 4,024 1,260 833
Adjusted R2 0.238 0.197 0.237 0.197 0.202 0.158 0.235 0.282

Determinants of Formal Training

Model OLS
Outcome Variable Firm offers formal training Y/N Share of workers received formal training (0 if no training)
Sample All Firms MENA 2013–2019 ECA 2013–2019 Manf. Firms MENA Manf. Firms (2013–2019) ECA Manf. Firms (2013–2019)
(1) (2) (3) (4) (5) (6)
Share of permanent full-time employees with a university degree (0 to 1) 0.257*** (0.051) 0.486*** (0.094) 0.193*** (0.057) 0.164*** (0.045) 0.332*** (0.080) 0.108** (0.052)
Overall management score 0.376*** (0.048) 0.072 (0.101) 0.454*** (0.054) 0.177*** (0.043) −0.038 (0.080) 0.233*** (0.049)
Top manager experience in sector (years) 0.000 (0.001) −0.005*** (0.002) 0.002 (0.001) 0.001* (0.001) −0.001 (0.001) 0.002* (0.001)
Log of age of firm −0.018 (0.016) 0.036 (0.024) −0.028 (0.018) −0.012 (0.013) 0.018 (0.017) −0.019 (0.015)
Proportion of temporary workers (out of all workers) −0.044 (0.156) −0.122 (0.175) −0.013 (0.183) −0.159** (0.078) 0.098 (0.185) −0.243*** (0.078)
Log of size 0.050*** (0.012) 0.040* (0.024) 0.048*** (0.014) 0.004 (0.009) −0.010 (0.020) 0.005 (0.010)
Senior management time spent in dealing with requirements of government regulations (%) 0.001 (0.001) −0.001 (0.001) 0.001* (0.001) 0.000 (0.000) −0.000 (0.001) 0.001 (0.001)
Average number of visits or required meetings with tax officials 0.002 (0.004) 0.034* (0.019) −0.002 (0.004) 0.001 (0.004) 0.008 (0.006) −0.001 (0.004)
Firm purchased fixed assets Y/N 0.145*** (0.020) 0.112*** (0.042) 0.149*** (0.022) 0.084*** (0.016) 0.060* (0.031) 0.086*** (0.019)
Direct exports 10% or more of sales Y/N −0.012 (0.024) −0.064 (0.041) 0.008 (0.028) −0.013 (0.018) −0.024 (0.029) −0.007 (0.023)
Foreign ownership Y/N 0.058** (0.027) 0.019 (0.062) 0.068** (0.029) 0.003 (0.022) 0.016 (0.043) 0.004 (0.025)
Female top manager Y/N 0.010 (0.033) 0.034 (0.085) 0.005 (0.035) 0.005 (0.023) −0.007 (0.043) 0.002 (0.024)
Establishment has checking or savings account Y/N 0.053 (0.040) 0.030 (0.064) 0.092* (0.050) 0.024 (0.026) 0.018 (0.019) 0.023 (0.040)
ISO Certification Ownership Y/N 0.131*** (0.025) 0.182*** (0.054) 0.114*** (0.028) 0.070*** (0.017) 0.111** (0.043) 0.060*** (0.019)
Website Y/N 0.053** (0.022) 0.013 (0.036) 0.068*** (0.025) 0.005 (0.016) 0.003 (0.023) 0.006 (0.020)
Firm identifying inadequately educated workforce as a major or severe constraint 0.056** (0.025) 0.028 (0.052) 0.058** (0.028) 0.029 (0.022) 0.009 (0.038) 0.039 (0.025)
Firm identifying labor regulations as a major or severe constraint Y/N 0.032 (0.034) −0.007 (0.053) 0.046 (0.039) −0.010 (0.029) −0.021 (0.031) −0.006 (0.038)
Competes against unregistered firms Y/N 0.044** (0.021) −0.002 (0.036) 0.057** (0.025) 0.025 (0.017) 0.007 (0.026) 0.033 (0.021)
Manufacturing Sector Y/N −0.077*** (0.023) −0.013 (0.047) −0.090*** (0.026)
Constant −0.329*** (0.076) −0.105 (0.160) −0.254** (0.105) −0.154*** (0.056) −0.066 (0.090) −0.120 (0.087)
Country Fixed Effects YES YES YES YES YES YES
Year Fixed effects YES YES YES YES YES YES
Number of observations 8,470 2,554 5,916 5,988 1,988 4,000
Adjusted R2 0.212 0.243 0.203 0.167 0.187 0.157
eISSN:
2520-1786
Language:
English
Publication timeframe:
Volume Open
Journal Subjects:
Business and Economics, Political Economics, Microeconomics, Macroecomics, Economic Policy, Mathematics and Statistics for Economists, Econometrics
Journal RSS Feed