Transformational Leadership and Firm Performance in Pakistan’s Banking Sector: A Comparative Analysis of the Mediating Roles of Self-Efficacy and Work Engagement in Hyderabad and Nawabshah

Abstract

This study investigates the effect of transformational leadership (TL) and firm performance (FP) in the private banking sector of Pakistan while examining the contextual mediating variables of employee self-efficacy (SE) and work engagement (WE). To examine regional differences, data from Hyderabad (N=156) and Nawabshah (N=100) were combined data from two separate studies. All studies applied Structural Equation Modeling (SEM) and SmartPLS. Results strongly suggest the relationship between TL and FP is positive and completely mediated by SE and WE. Regional differences characterizing the strength of the relationships, the SE WE mediating variables and the dimensions of TL most associated also vary regionally. This paper is a cross regional comparative study which deals with the leadership banking sector in Pakistan and provides guidelines for further studies.