A Review of Approaches of Resource-based Empirical Research in Banking

This research reviews the approaches employed in banking empirical studies that use the resource-based view as a core theoretical anchor to relate bank resources to performance outcomes. The review dwelt on measurement issues and strategies for controlling confounding factors. Six approaches of measuring bank resources are identified as: indirect assessment through the use of observable attributes, direct assessment through output counts, direct assessment by top managers, direct assessment by customers, direct assessment by experts and indirect assessment through inductive case studies. Three approaches to measuring bank performance are identified as: the use of only financial measures, the use of only nonfinancial measures and the use of a mix of financial and nonfinancial measures. Overall, approaches that relate bank resources, strategy and performance have great potential to advance the resource-based view theory from being a mere theoretical framework to being a practical framework for practicing managers in banking firms.