Role of Managerial Innovation Behavior for moderating the effect of the Dynamic Innovation Capability on Banking Performance: Evidence from Pakistan

The current study attempts to address the role of dynamic innovation capabilities, along with innovative work behavior of managerial employees, to explain banking performance in Pakistan. Furthermore, it also examines the moderating role of innovative work behavior. For testing the set of proposed hypotheses, the data was collected from 413 participants working at managerial positions in different banks across Pakistan. The study employed Structural Equation Modeling (SEM) to achieve the research objectives. The results revealed internal and external reliability and validity along with a statically fit model. It was found that innovation capabilities, especially organizational innovation and process innovation, along with managerial innovation behavior have a strong optimistic effect on banks’ performance in Pakistan. Furthermore, innovative work performance strongly moderates the impact of dynamic innovation capabilities on banking performance in Pakistan. The study has managerial and practical implications for policymakers, leaders, higher management, and decision-makers in the banking sector of Pakistan. Furthermore, limitations and suggestions for future research are also incorporated.