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ISSN 2385-2275 No. 23 - June 2016

Training, quality of management and firm level bargaining

Mirella DAMIANI
University of Perugia, Department of Economics, Perugia, Italy

Andrea RICCI

ISFOL, Rome, Italy

 Abstract:

The double aim of this paper is to investigate the link between firm training behaviour and the
adoption of performance-related pay (PRP) and to verify how the quality of management
contributes to explaining the strength of this link. Using Ordinary Least Squares Estimates and
Fixed Effect Estimates for a sample of Italian firms, we find that training is a significant
determinant of firm level bargaining on PRP. Furthermore, we find that managerial quality plays a
significant positive role and suggest that this is because managerial quality favours the evolution of
social norms based on wage bonuses that enhance trust, sustain collaborative relationships and
motivate co-workers to train each other.

JEL Classification: M53; M52; J50; I20

Keywords: Training, Compensation, Management, Education

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