To Gear Up Firm Performance in Banking Industry: The Role of Dynamic Capability

This article aims to examine the performance implications of dynamic capabilities in the banking firms and explain the degree of influence that learning, integration, reconfiguration and alliance management dynamic capabilities are likely to have on a bank’s financial and non-financial performance. Using 439 samples of managers in Indian banking firms, structural equation modelling (SEM) was directed and found that dynamic capability is a vital driver of banks’ performance. Learning, integration and alliance management dynamic capabilities have significant relationship with banks’ financial and non-financial performance. The insignificance of reconfiguration capability for financial performance is also revealed. Practically, findings will serve banking sector, useful course-of-action to overcome the present competitive-pressures as well counter the future challenges through depth knowledge on specific dynamic capability investment and respective performance-improvement. Stranded on these findings, practical implications, limitations and future research directions are also conversed.