Government Ownership Effect on Staffing Level and Financial Performance: A Case Study on Kuwaiti Banks

Musaed S. AlAli and Tariq Saeed
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Musaed S. AlAli: Department of Insurance and Banking, College of Business Studies, The Public Authority for Applied Education and Training (PAAET), Kuwait
Tariq Saeed: Department of Information Science, College of Computer Science & Engineering, Taibah University, Saudi Arabia

International Journal of Finance & Banking Studies, 2020, vol. 9, issue 3, 99-104

Abstract: It has always been believed that government ownership would lead to overstaffing, inefficiency, and bad financial performance in any organization. This study aims to examine the effect of government ownership on staffing level and the financial performance of Kuwaiti bank over the period 2010-2018. Using panel OLS regression method based on the financial data of ten banks listed at Kuwait stock exchange (KSE), results showed that there was a statistically significant direct relation between government ownership and overstaffing and statistically significant inverse relation between government ownership and the financial performance of banks measured by return on assets (ROA). On the other hand, results showed that there was no relation between overstaffing and the financial performance of Kuwaiti banks. Results presented in this research shows the roll government ownership plays in inflating staff numbers in Kuwaiti banks for political rather than economic reasons and also the government influence on the decision making process in these banks resulting in lower financial performance.

Keywords: Government Ownership; Kuwaiti Banks; Staffing level; Financial Performance; Panel OLS Analysis (search for similar items in EconPapers)
Date: 2020
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