Leadership models and the promotion of innovation: Case study in the banking and FinTech sector in Kosovo

Objectives This paper aims to identify the orientation of leaders in terms of leadership styles and to measure the influence of leadership styles (transactional, transformational, and passive avoid leadership) in incentivizing innovations in financial institutions in Kosovo, thus filling the gap that exists between the leadership style used and the influential one in incentivizing innovations. Methods To achieve the objectives of the research, a quantitative method was used based on primary data. To study leadership styles, The Full Range Model of Leadership was used, where the questionnaire was created based on the Multifactor Leadership Questionnaire (MLQ 5X). The MLQ consists of 36 questions within the nine components of the full range leadership model measured through Likert scale. Part of the research were 361 workers of commercial banks and 314 workers of microfinance and FinTech institutions. Findings Based on the multiple linear regression analysis, transactional leadership demonstrates stronger effect on promoting innovation compared to transformational and passive avoidant style. Novelty/improvement This research enables giving recommendations for financial institutions in Kosovo, to enable the incentivizing of innovations through strengthening the leadership style with the greatest impact on innovations.