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The last two hypotheses, hypotheses 10 and 11, propose that the renewal of capabilities will be positively related to the change in firm performance. Hypotheses 10 and 11 were tested using two measures for firm performance. First, hypotheses were tested using the change in

DV IV

Hypothesiz ed Re lationship Be twe en IV

and DV

Results: Re ve nue Ge ne rating Capabilities as Predictor

Re sults: O perating Capabilitie s as Pre dictor

Results: Top Management Te am C apabilitie s as Pre dictor

Models supported: Retail and

Commercial Not supported

Models supported: Sharing best practices across units

(Not examined) U-shaped Change in Capability Effectiveness Future Acquisition

H8 Alternative findings: Inverted U-

shaped relationship with ability to instill climate and cohesiveness and ability to instill direction and vision

H9 Future Acquisition

Change in Capability

Scope Negative (Not examined)

Alternative findings: Inverted U- shaped for Merchant Services and T reasury Management

Alternative findings: Inverted U- shaped for Branch Management, Risk Management, and Compliance

Models supported: Commercial Banking, Commercial Real Estate, and Payroll and T ax

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ROA as a measure of firm performance. Then, hypotheses were tested using the change in market share as a measure of firm performance. Statistical analysis supports the hypotheses if model fit is significant and the coefficient for the change in effectiveness is negative or zero for firm performance at time 1 and positive and significant for firm performance at time 2.

Hypothesis 10 suggests that a change in the effectiveness of capabilities will be positively related to the change in firm performance. To test hypothesis 10, the change in ROA was regressed on the change in revenue (Table 29), operating (Table 30), and TMT capabilities (Table 31). Consistent with hypothesis 10, Models 2 and 5 in Table 29 were both significant and illustrated a positive and significant relationship between the change in mortgage and commercial revenue-generating capabilities and the change in ROA. Furthermore, the R-square for Models 2 and 5 in Table 29 was 0.077 and 0.066, respectively.

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Alternatively, results presented in Tables 30 and 31 reveal an insignificant relationship between the change in effectiveness of all operating (Table 30) and all TMT (Table 31) capabilities and the change in firm ROA, alternative to hypothesis 10.

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To test hypothesis 10 using market share as a measure of firm performance, the change in market share was regressed on the change in revenue (Table 32), operating (Table 33), and TMT capabilities (Table 34). When tests were conducted using the change in market share as an indicator of firm performance (see Tables 32-34), results again revealed a positive and significant relationship between some revenue-generating capabilities and the change in firm performance. Consistent with hypothesis 10, Models 1, 2, and 5 in Table 32 were significant and illustrated a positive and significant relationship between the change in effectiveness of retail (Model 1), mortgage (Model 2), and commercial (Model 5) revenue-generating capabilities and

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the change in firm market share. Furthermore, the R-square for Models 1, 2, and 5 in Table 32 was 0.080; 0.071; and 0.086, respectively. Additionally, contrary to hypothesis 10, results in Tables 33 and 34 reveal an insignificant relationship between the change in effectiveness of all operating (Table 33) and all TMT (Table 34) capabilities and the change in firm market share.

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Taken together, the above analyses provide partial support for hypothesis 10. Consistent with hypothesis 10, the change in effectiveness of some revenue-generating capabilities was positively related to a change in firm performance. However, alternative to hypothesis 10, the change in effectiveness of operating and TMT capabilities was not significantly related to the change in firm performance. Below is a table summarizing the findings concerning hypothesis 10.

SUMMARY RESULTS: H10

Hypothesis 11 proposed that the change in the scope of capabilities would be positively related to the change in firm performance. To test hypothesis 11, the change in ROA was regressed on the change in capability scope. As discussed previously, the change in scope was measured using two methods--a continuous variable and dichotomous variable. Table 35

DV IV Hypothe si z e d Re lationship Be twe e n IV and DV DV Proxy

Re sults: C hange in Effe ctive ne ss of Re ve nue Ge ne rati ng C apabi litie s as

Pre dictor Re sults: C hange in Effe ctive ne ss of O pe rating Capabi litie s as Pre dictor Re sults: C hange i n Effe ctive ne ss of Top Manage me nt Te am C apabili tie s as

Pre dictor

Models Supported: Mortgage and Commercial Not Support ed Not Supported

Models Supported: Ret ail, Mortage, and

Commercial Not Support ed Not Supported

H10 Change in Performance ROA Market Share Change in Capabilit y Effectiveness Posit ive

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presents the results for regression analyses in which the change in ROA was regressed on the change in capability scope measured through the continuous variable while Table 36 presents the results for the regression analyses in which the change in ROA was regressed on the change in capability scope measured through the dichotomous variable. As illustrated in Tables 35 and 36, results were insignificant across all capabilities (see Table 35 and 36) regardless of the method used to assess the change in capability scope. Consequently, a change in capability scope was not associated with a change in ROA.

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Alternatively, when hypothesis 11 was tested using market share to assess a change in firm performance, several scope variables were positively related to a change in firm performance. Table 37 presents the results for regression analyses in which the change in market share was regressed on the change in capability scope measured through the continuous variable. Consistent with hypothesis 11, Models 6, 7, and 13 in Table 37 were all significant and revealed positive and significant relationship between the change in scope in corporate (Model 6), commercial real estate (Model 7), and specialty services (Model 13) capabilities and the change in firm market share. Furthermore, the R-square for Models 6, 7, and 13 in Table 37 was 0.071; 0.072; and 0.074, respectively. Additionally, the sequentially rejective Bonferroni test was used to reduce the likelihood of concluding that an effect exists when in reality no effect is present and provided support for the presence of an effect in the models listed.

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The second method to examine the change in scope of capabilities that used a dichotomous measure assesses the possession of capabilities at prior to acquisition and two years after acquisition. Using this method, hypothesis 11 would be supported if b1 for the models

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predicting market share in time 2 was positive and significant, b2 for the same model was

negative and significant, and b1 and b2 for the model predicting market share in time 1 were

negative or zero. Using this method, results across the various revenue-generating capabilities were insignificant as illustrated in Table 38.

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Taken together, results provide partial support for hypothesis 11 that proposed that the change in capability scope would be positively associated with the change in firm performance. Consistent with hypothesis 11, the change in capability scope was positively related to a change in firm market share. However, alternative to hypothesis 11, the change in capability scope was not significantly related to the change in ROA. Below is a table summarizing the findings concerning hypothesis 11. SUMMARY RESULTS: H12 DV IV Hypothe siz e d Re lationship Be twee n IV and DV DV Proxy

Me thod 1: C hange in Scope of Re ve nue Ge ne rating C apabilitie s as Pre dictor

Method 2: Diffe re nce in Scope of Reve nue Ge ne rati ng C apabil itie s at T1

and T2 as Pre dictor

ROA Not Support ed Not Supported

Not Supported Models Supported: Corporate, Commercial

Real Estate, and Specialty Services H11 Change in Performance Change in Capability Scope Positive _Market Share

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