Ravi Bapna
Board of Overseers Professor of Information and Decision Sciences Department,
Carlson School of Management,
University of Minnesota
November 12, 2010
Speakman Hall 200, 1000am – 1130am
Abstract
The revenue growth model of IT services firms has been historically been based on scaling of firm size. However, as firms have become bigger, it has increasing become a pertinent question to examine whether some other lever to improve firm productivity may exist. In this paper, we use a panel data of Indian IT services firms to specifically examine how investments in training may impact firm productivity. We use a combination of econometric methodologies to eliminate the simultaneity bias so prevalent in studies of this type. We find that training is indeed a very important ingredient of achieving high firm productivity and may give returns that are orders of magnitude high compared to the investments. We also find that bigger firms enjoy much more benefits from training compared to the smaller firms.
For a copy of the paper, click here.