Do Middle Managers Capabilities Matter?

Middle Managers are key figures for firm ability to gain and sustaining competitive advantage. Their training activity can be seen as an important tool for improving and upgrading managerial practices within the firm in order to sustain firm strategy. The present research investigates the effects of middle managers training on firm performance as measured by profitability indices and productivity using data on Italian manufacturing firms for the period 2006-2011. The study extends the existing literature because: (a) it analyzes the methodology used and the field in which the training is done; (b) it investigates different measures of training, namely the cost in euros and the time devoted to the activity. We empirically test research hypotheses using regression models based on GMM estimation and we find support for the following: (H1) Middle management continuing vocational training has an effect on performance indicators namely return on investment, return on equity and total factor productivity, Moreover the first two show a too.much-of-a-good-thing effect; Middle Managers training is more effective for: larger firms, older firms (H2 and H3); external resources are important in making Middle Managers training effective (H3); different methodologies of training have heterogeneous effects on performance: experiential methods are more effective than relational and front lesson methods (H5). Managerial implications are derived.