Linking ethical leadership to administrative innovation in Ethiopian banks: the mediating role of knowledge process capabilities

Purpose This paper aims to examine the mediating role of knowledge process capability (KPC) between ethical leadership (EL) and administrative innovation (AI) in the banking sector of Ethiopia. Design/methodology/approach The study was conducted by a standardized questionnaire survey to collect the data from 266 employees of Commercial Bank of Ethiopia in 93 branches. The study employed structural equation modeling approach with Analyzing Moment of Structures 23.0 to test the hypothesized mediation model. Findings The results of this investigation disclose that EL has a significant and direct effect on AI and KPC. KPC also influences AI significantly. Originality/value The study revealed that KPC plays a partial mediating role in linking EL to AI, which is a new contribution to the existing literature of EL. This dimension can provide new dimensions to design organizational leadership which is based on sustainability paradigm. This can strengthen the organizational capabilities aiming to increasing innovative behaviors in order to have a deep-seated strategy.