The importance of owner-managed SMEs and regional apprenticeship activity: evidence from the German Mittelstand

Abstract

BackgroundPoliticians frequently emphasize the importance of Mittelstand firms for the economy, thereby particularly referring to their enormous engagement in training apprentices. This view is especially prevailing in Germany, leading to political promotion of Mittelstand firms on the regional and the national level. However, due to data availability, there is yet almost no empirical evidence on the question whether Mittelstand firms are in fact excessively active in training apprentices. This paper aims at filling this gap in the empirical literature by using a firm dataset from Creditreform.MethodsCombining information from Creditreform with regional data of West German counties, we study whether the relative importance of owner-managed small and medium sized enterprises has an effect on firms’ apprenticeship activity.Results and ConclusionsWe thereby find a significantly positive relation between the relative importance of Mittelstand firms and apprenticeship activity on the regional level. However, on the national level an increase in the share of Mittelstand firms turns out to be without effect on apprenticeship activity.