seemed to work in both directions. First, management’s misperception about the continued benefit of using piece-rates, and second, employees misinforming the owners about the value of the technology to prevent its uptake. Evidence from the OECD validates this, and suggests that firms that adopt more performance-based schemes are more likely to offer job training (for example, Gittleman, Horrigan and Joyce 1998).

Regarding the final issue of information asymmetry about the types of programs available in the market, two studies (Bloom and others 2013; Atkin and others 2015) find that it exists, but is not a critical problem. For textile firms, for less commonly known practices, once this information was provided to firm owners through consulting firms, adoption rates improved drastically. In the Pakistan study, the only firm that successfully adopted the new technology was found to pay a performance bonus (a better gain-sharing arrangement), indicating that such knowledge was available in the market. However, few owners adopted the new practice. These cases indicate that compared to information asymmetry about types of training available, it is in fact, information barriers within the firm at the level of managers/owners, that are perhaps more binding in nature.

# 3.2 Factors outside firms: Low competition

Studies show that the environment in which the firm operates matters in terms of OJT adoption. External factors (such as competition) can act as levers to pull internal factors (such as management capability and adoption of complementary technologies). Firms facing greater competition in their product markets are inclined to raise the minimum productivity threshold to operate profitably and reduce inefficiencies. They do this through both investing in productivityenhancing activities (such as OJT and ICT), and reducing costs, which in turn helps them capture greater market shares of existing ones (Almeida and Aterido 2008; Lopez-Acevdeo and others 2016). Competition also helps to reallocate resources from the less productive to the more productive firms, increasing the incentives for all firms, to invest in the within-firm productivity levers discussed in section 3.1.

The literature also indicates that trade and foreign direct investment (FDI) can affect productivity through providing greater opportunities for exporting and learning by doing, increasing access to new markets, more competition from imports, and selection and reallocation effects (Melitz 2003; Pavcnik 2002; Bloom, Draca and Van Reenen 2016). Complementary studies have examined the role of human capital in the process of adopting new technologies—which becomes even more important as markets open up and standards become more demanding (Bartel and Lichtenberg 1987; Berman, Bound, and Griliches 1994; Bugamelli and Pagano 2004; Doms, Dunne, and Troske 1997; Disney, Haskel and Heden 2003).

Let us focus on the case of exporters as an example. Bustos (2011) found that exporters tend to be more skill intensive in both production and non-production occupations in Argentina. She also showed that technology and skill deepening are positively associated at the firm level. Brambilla, Lederman and Porto (2012) observed that the nature of destination markets matters for the type of skills provided. In more sophisticated destination markets, exporting firms need to meet higher standards, while also being cost competitive. These results, in the form of an exporter productivity premium, are confirmed in developing countries by Blalock and Gertler (2004), Clerides, Lachand Tybout (1998), and De Loecker (2007). Export is linked to being able to make higher quality products, which requires better human capital (Fieler, Eslava and Xu 2014; Khandelwal 2010).

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