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Bauernschuster, Stefan; Falck, Oliver; Heblich, Stephan (2009): Training and innovation. In: Journal of Human Capital, Vol. 3, No. 4: pp. 323-353
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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.