Agglomeration and workplace training: knowledge spillovers versus poaching

Agglomeration and workplace training: knowledge spillovers versus poaching. Regional Studies. The paper aims at ascertaining whether and how a local agglomeration of highly educated employers affects firms’ propensity to invest in training. On a theoretical ground such agglomeration may favour two different scenarios: a knowledge spillover effect may foster larger investments, or a poaching effect may prevail inducing more competition and less training. Econometric estimates find that in the Italian environment, where small businesses are prominent, the second effect is stronger. Endogeneity issues are addressed by adopting an instrumental variables (IV) approach. Moreover, estimates show that an employer’s higher educational level is associated with a greater propensity to sponsor training.