The Relationship between Innovation, Performance and Competitive Advantage among Banks in Ghana

Abstract

This study assesses the relationship between innovation, performance and competitive advantage among Ghanaian banks. It uses the subjective way of customer perception to measure innovation, performance and competitive advantage with questions based on theory. The customers involved are mainly retail customers who visit their respective banks. The research is carried out in Accra and encompasses banks listed on the Ghana Stock Exchange. A Structural Equation Model (SEM) with respect to Confirmatory Factor Analysis (CFA) is used as an analytical tool. Findings show that; there exists a positive relationship between innovation, performance and competitive advantage. However, the relationship between performance and innovation is not that significant. This might be because there are other factors that enhance performance apart from innovation.