African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4094

Full Length Research Paper

Resource-based determinants of performance in the Tanzanian commercial banking subsector

Ligang Liu1, Vedastus Timothy2* and Yang Gao2
1Sun Wah International Business School, Liaoning University, China. 2Liaoning University Business School, Shenyang, China.
Email: [email protected]

  •  Accepted: 15 June 2010
  •  Published: 04 August 2011

Abstract

The purpose of this paper is to examine the resource-based performance determinants for commercial banks in Tanzania. The focus of the paper is on how financial performance of the commercial banks in the country is attributable to bank-specific resources. The paper compared the influence of different tangible and intangible bank-specific resources on bank profitability using a survey of 17 top commercial bank executives and annual data from 15 commercial banks. The results confirmed that organisational capabilities are key determinants of commercial bank performance in Tanzania. On the other hand, the results found no support of the effectiveness of intangible assets in creating economic benefit to the banks. The poor contribution of intangible assets to commercial bank performance implies that Tanzanian commercial banks have not been able to harness and deploy intangible assets effectively, making them vulnerable to competitor imitations. These findings call for more attention to be put on harnessing and deploying intangible assets for sustainable success of commercial banks in Tanzania. This paper is original in developing a framework of evaluating resources’ relative importance on bank performance.

 

Key words: Tanzania, banking, bank performance, resource-based view.