The Effect Of The Relationship Between Strategy And Competitive Advantage To Improve The Financial Performance In The Iraqi Banking Sector

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Falah Saleem Falih , Rozilah Kasim , Maryam Hamid Yaseen


Institutions have taken into consideration the rapid shifts in the business environment, which made them consider implementing various strategies to face fierce worldwide market competition and reduce adverse repercussions on financial performance.

Such a competitive situation has become increasingly challenging for many organizations, in general, and particularly banks.

This paper aims to explore how the effect of the relationship between strategy and competitive advantage in improve financial performance in the Iraqi banking sector by evaluating the mediating function of competitive advantage in the association between strategy and financial performance.

A quantitative approach is used to obtain data from a survey (questionnaire) consisting of 60 items with a five-point Likert scale. A total of 132 managers participated in the Iraqi banking sector in the study. (a 83.6% response rate). The data analysis was conducted using Smart PLS 3.2.9.

The findings of the path analysis of partial least squares (PLS) support variables in their hypothesized direct relationships with financial performance.

The empirical findings show that competitive advantage partially mediates the relationship between strategy and financial performance.

The paper advances several recommendations that can be beneficial for researchers to conduct further studies in this area as well as policymakers and managers in their efforts to enhance the financial performance of organizations in the future.

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