Can employee training facilitate production repurposing in crises? An ability-motivation-opportunity perspective

Production repurposing is an initiative for firms to alter their manufacturing capabilities and outputs to meet new demands, particularly during times of crisis. This initiative is crucial for businesses to remain resilient to unexpected changes in the market. Despite its importance, the specific factors that drive production repurposing during crises, especially from the perspective of human capital development, are not well understood. Drawing upon the ability, motivation, and opportunity (AMO) framework, this study aims to examine the impact of pre-pandemic employee training, an ability-enhancing practice, on production repurposing during the pandemic. Based on a dataset of 4679 firm-year observations from 32 countries sourced from the World Bank, our regression results indicate that firms that engaged in pre-pandemic employee training are more likely to initiate production repurposing during the pandemic. Furthermore, we delve into the moderating roles of government wage subsides, a motivation factor, and labor shortages, an opportunity constraint. The results reveal that government wage subsidies amplify the positive effect of pre-pandemic training on production repurposing, whereas labor shortages dampen this impact. Our heterogeneity analysis further suggests that national socioeconomic features can influence these relationships. This study underscores the role of employee training in preparing firms to actively adapt during crises. It also highlights the necessity of providing adequate motivations and creating conducive opportunities to facilitate human capital. These insights are valuable for managers and policymakers aiming to enhance firm adaptability and ensure resilient operations during crises.