Competence development and performance among Swedish micro firms

Purpose: This study examines the association between performance and competence development among Swedish micro firms, measured as number of hours per person a company allocates annually to competence development. Design/methodology/approach: A panel dataset consisting of around 395 firms will be analyzed using seemingly unrelated regression-model (SUR-model) for relationships between the hours allocated to competence development and various proxies for business performance, and the relationship between attending a business training program and various proxies for business performance. Findings: The empirical results are mixed showing a positive association between owners' attendance on a business training program and company performance merely with regard to four performance variables: better job satisfaction within a company, increased number of employees, organizational improvements and increased exports. However, the findings provide no evidence to suggest that there is a link between competence development and other performance variables. Practical implications: The present study provides a better understanding of the relationship between company performance and competence development. An investment in entrepreneur training and education could ensure the improvement of the performance of micro firms. This implication is especially relevant to firms in such industries as the service sectors, which are highly competitive. Originality/value: This study is based on a unique sample including many relevant variables, compared to previous researches. To the authors' best knowledge, this study is the one of the first empirical investigations focusing on this issue in the Swedish context