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ISSN 2385-2275 No. 23 - June 2016

Training, quality of management and firm level bargaining

University of Perugia, Department of Economics, Perugia, Italy

Andrea RICCI

ISFOL, Rome, Italy


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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