Evaluating Long-term Performance of Commercial Banks from Sustainable Competitive Advantage Perspective, Focusing on Role of Management Efficiency: Comparison of Iranian Private and Public Banks

Organizational performance and thus, organizational value can be improved by running measures which are critical factors of success. Meanwhile, one of the most important organizations, operating in service sector and plays role in development of the country, is banks. It seems that managers with higher efficiency seeking to maximize their performance and consequently, gaining sustainable competitive advantage over their competitors. Then, it is expected that management efficiency could moderate the relationship between long term performance and sustainable competitive advantage. The present study arguably aims to develop a model of long term performance of commercial banks from sustainable competitive advantage perspective, focusing on role of management efficiency. The research hypotheses are tested using a sample of ۲۳ listed banks in Tehran Stock Exchange over the period of ۲۰۱۱ to ۲۰۱۸ and employing multivariate regression model. Data analysis is performed by Eveiws-۱۰ software. The results suggest that the identified factors for long term performance of commercial banks, including financial performance (economic added value) and profitability indices (Tobin’s Q ratio, return on asset, and return on equity) also affect sustainable competitive advantage of the bank. Moreover, management efficiency moderates the relationship between long term performance of commercial banks (economic added value, Tobin’s Q ratio, return on asset, and return on equity) and the bank’s sustainable competitive advantage. As the coefficients obtained for private banks are higher than coefficients of the public banks, it is recommended that the banks move toward privatization, such that the management efficiency would be increased.

Keywords:

management efficiency , Long-term performance of commercial bank , Sustainable Competitive Advantage , Financial Performance