Generic strategies and financial performance persistence in the bank sector in Indonesia / Etikah Karyani and Hilda R. Rossieta.

Karyani, Etikah and R. Rossieta, Hilda (2018) Generic strategies and financial performance persistence in the bank sector in Indonesia / Etikah Karyani and Hilda R. Rossieta. Management & Accounting Review (MAR), 17 (1). pp. 79-96. ISSN 2550-1895

Abstract

This study investigates the relationship between the bank strategic positioning and performance. A central question in the management literature has been to identify the sources of competitive advantage that allow firms to attain and persistent superior performance over their competitors. Bank can build competitive advantages by following either a cost leadership or a differentiation strategy. Bank adopting a cost leadership strategy principally attain advantages based on operational efficiency, and hence the performance of such firms should more persist over time than other bank adopting differentiation strategy. This study documents an empirical investigation of this premise using a sample of 216 firm-years over the period 2009-2013. This study details the development of constructs using audited financial-level archival data to capture a bank's strategic positioning. These constructs are then used in empirical models that explore the persistence of bank performance. Using confirmatory factor analysis, the results of these models estimation indicate that although both cost leadership and differentiation strategies have a positive effect on contemporaneous performance, only the efficiency strategy allows a bank to achieve and maintain superior performance in the future.

Metadata

Item Type: Article
Creators:
CreatorsID Num. / Email
Karyani, EtikahUNSPECIFIED
R. Rossieta, HildaUNSPECIFIED
Subjects: H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Management & Accounting Review (MAR)
Journal: UiTM Journal > Management & Accounting Review
ISSN: 2550-1895
Volume: 17
Number: 1
Page Range: pp. 79-96
Item ID: 30300
Uncontrolled Keywords: Generic strategy, Efficiency, Differentiation, Persistence
URI: http://ir.uitm.edu.my/id/eprint/30300

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