Employees’ Educational Composition and Firm’ Learning Evidence from Manufacturing Industries in Iran

Learning can be analyzed at the individual level in addition to firm’s level. But, with a closer look, learning by firms depends on the composition of employees which can be apart in terms of educational levels. In Iran, educational level of manufacturing firms is divided to seven groups, including illiterate, not holding high school diploma, holding high school diploma, associate, bachelor, master and doctorate. In this regards, with combining these levels, two groups of higher education and non-higher education can be obtained and so learning is expected to be diverse in these two groups. Accordingly, this article focuses on investigating the effect of higher education level on learning, using data in the Non-metallic mineral products manufacturing firms as one of the main manufacturing industries in Iran. With investigating two distributions, Pareto and Lognormal, the results of this study have shown that a certain threshold of percentage of higher educated employees for affecting on firm learning is needed. In particular, firms with more than 30 percent of employees affects firm’s learning and follows Pareto distribution. From policy point of view, this finding indicates that soft business support, instead of hard business support, including employee’s education can be considered as one of the most industrial policy in the case of developing countries.

Employees education composition, Pareto distribution, Firm’s learning, Manufacturing industries, Iran.