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Competitive advantage

Competitive advantage PurposeThe purpose of this paper is to examine the mediating role of competitive advantage in the relationship between managerial competence and financial performance of commercial banks in Uganda.Design/methodology/approachA cross-sectional survey was employed using 22 fully licensed and operational commercial banks in Uganda. Data were analyzed using descriptive statistics, zero order correlation and hierarchical regression analyses. Further, the bootstrap method was used to test the mediation effect of competitive advantage. All the analyses were performed using SPSS v21.FindingsThe findings reinforce the important position of managerial competence on financial performance of commercial banks. First, managerial competence enhances firms’ competitive advantage. Second, managerial competence has an indirect effect on financial performance through competitive advantage. Overall, managerial competence and competitive advantage are strong predictors of financial performance of commercial banks.Research limitations/implicationsThe study employed only a single research methodological approach, therefore future research could be undertaken using a mixed approach and triangulate to compare findings. Furthermore, the findings from the present study are cross-sectional, considering the limitations there in, a longitudinal approach should be explored.Practical implicationsEmphasis should be put on improving the knowledge and skills of managers so as to attain a competitive edge in the market and thus register increased profits. This will help practitioners make legitimate decisions and conclusions that can foster business growth.Originality/valueA mediation effect of competitive advantage in the relationship between managerial competence and financial performance was tested; previous studies have tended to test the direct effects. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png African Journal of Economic and Management Studies Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
2040-0705
DOI
10.1108/AJEMS-10-2016-0142
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to examine the mediating role of competitive advantage in the relationship between managerial competence and financial performance of commercial banks in Uganda.Design/methodology/approachA cross-sectional survey was employed using 22 fully licensed and operational commercial banks in Uganda. Data were analyzed using descriptive statistics, zero order correlation and hierarchical regression analyses. Further, the bootstrap method was used to test the mediation effect of competitive advantage. All the analyses were performed using SPSS v21.FindingsThe findings reinforce the important position of managerial competence on financial performance of commercial banks. First, managerial competence enhances firms’ competitive advantage. Second, managerial competence has an indirect effect on financial performance through competitive advantage. Overall, managerial competence and competitive advantage are strong predictors of financial performance of commercial banks.Research limitations/implicationsThe study employed only a single research methodological approach, therefore future research could be undertaken using a mixed approach and triangulate to compare findings. Furthermore, the findings from the present study are cross-sectional, considering the limitations there in, a longitudinal approach should be explored.Practical implicationsEmphasis should be put on improving the knowledge and skills of managers so as to attain a competitive edge in the market and thus register increased profits. This will help practitioners make legitimate decisions and conclusions that can foster business growth.Originality/valueA mediation effect of competitive advantage in the relationship between managerial competence and financial performance was tested; previous studies have tended to test the direct effects.

Journal

African Journal of Economic and Management StudiesEmerald Publishing

Published: Jun 12, 2017

References