The relationship between training effectiveness and financial performance in cooperative organizations

Abstract

Purpose The purpose of this study was to identify the relationship between training and financial performance in cooperative organizations. Design/methodology/approach To achieve this goal, the fixed-effect panel regression technique was used, from a single database containing hours and amounts invested in training by 35 large Brazilian agribusiness cooperatives over 10 years as the main independent variable of the econometric model. Financial performance was operationalized by the Net Margin and ROE. Findings It was possible to identify a positive relationship between expenditure on training and the future rate of return and profitability of the organizations in question. The results also indicate that this relationship grows stronger over the first three years after the investments are made and ceases to exist after this period. The findings are robust with regard to a series of alternative explanations and contribute to understanding the relationship between training and organizational performance in financial terms, considering the extent and duration of training. Originality/value The originality this study is justified by the pioneering spirit of presenting direct evidence linking investment in training and financial performance and the duration of this relationship. Thus, the study makes a significant contribution to the construction of knowledge on the subject.