IMPACT OF EMPLOYEE TRAINING INVESTMENT ON FIRM FINANCIAL PERFORMANCE: EVIDENCE FROM QATAR

Abstract

Employee training represents a strategic investment in human capital that can strengthen organisational competitiveness and contribute to sustainable financial performance. This study investigates the influence of training investment (TI) on the financial performance of non-financial firms listed on the Qatar Stock Exchange (QSE) between 2019 and 2023. TI was primarily measured as training expenditure relative to operating expenses, while training expenditure per employee was employed as an alternative measure to verify the robustness of the findings. A firm-year panel dataset was compiled from annual and sustainability reports for empirical analysis. Two-way fixed-effects panel regressions incorporating firm and year effects, together with clustered standard errors, were estimated. The results demonstrate that TI is positively associated with profitability and operational efficiency, as reflected by Return on Assets (ROA), Net Profit Margin (NPM), and Return on Equity (ROE). The observed relationships remained robust across lagged, first-difference, and sequential specifications, including models excluding extreme TI observations above the 90th percentile, as well as industry-clustered estimations and analyses based on lower industry-level TI. Overall, the evidence indicates that embedding training within routine organisational operations through continuous professional development creates measurable organisational value rather than constituting a discretionary cost. These findings further emphasise the importance of stronger human-capital disclosure practices and greater strategic emphasis on learning and development investment.