RESOURCE-BASED VIEW & PERFORMANCE OF ISLAMIC BANKS
A QUANTITATIVE STUDY TO REFLECT LIGHT ON RELATIONSHIP IN THE PRESENCE OF CSR ACTIVITIES
Keywords:
Islamic Banking, Resource-Based View, Cost-Leadership strategies & Differentiation strategiesAbstract
Purpose
In recent times Islamic Banks are in stiff competition with commercial as well as Islamic banks. In fact, the competition is harder than other categories of the banking sector. Hence the use of marketing and promotional strategies is a must to create a better image of the firm’s offering over the bank's performance. However, there is a lack of studies that may relate the resource-based view (RBV) to the performance of Islamic Banks. Therefore, this study has been conducted purposively to understand the use of cost-leadership and differentiation strategies over the performance of Islamic banks.
Methodology
This study does not collect data from Islamic window Banks like Habib Bank, Al-Habib Bank, Standard Chartered Bank, etc. Hence, data has been collected only from the middle and top-layer managers of leading Islamic Banks and the sample size for the study is 250.
Findings
Findings of the study indicated that differentiation strategy has significant impact over CSR as well as performance of the Islamic Banks. Hence, in the recent era use of differentiation strategies might be more preferred by Islamic Banks.
Practical Implications
This study has been grounded upon the professionals from the Islamic banking industry from Pakistan and statistical testing of the structural equation modeling reflected that RBV is a significant view for enhancing the performance of larger firms and the use of cost-leadership & differentiation strategies are pleasing for the performance of firms from the Islamic banking industry.
Significance
This study is not only associated with the relationship of generic strategies by Islamic Banks over the bank performance but will also leads to better understanding of indirect impact of CSR activities over performance of the bank. Therefore, use of this study will lead to better policy making as well as research integration in the related arenas.
