Mugambi, Lucy MakenaKinyua, Godfrey M.2020-12-012020-12-012020Mugambi, L., & Kinyua, G. (2020). Role of Innovation Capability on firm performance in the context of Commercial Banks in Nairobi City County, Kenya. International Journal of Current Aspects in Finance, Banking and Accounting, 2(3), 14-23. https://doi.org/10.35942/ijcfa.v2i3.1462707-8035https://journals.ijcab.org/journals/index.php/IJCFA/article/view/146http://ir-library.ku.ac.ke/handle/123456789/21046A research article published in International Journal of Current Aspects in Finance, Banking and AccountingThe Kenyan banking industry is characterized by increased environmental dynamism brought about by rapid technological development, customer sophistication and regulations. The achievement and sustenance of competitive advantage is important as any organization that does not gain and sustain this may not survive. In order for an organization to remain relevant, it must be able to leverage on innovation capability for effective adaptation to changes in the environment. This study therefore sought to assess the influence of innovation capability on performance of Commercial Banks in Nairobi City County, Kenya.The study was anchored on dynamic capabilities theory and resource-based view, Resource. Descriptive research design was used for this study. The target population was Commercial Banks in Nairobi City County. The unit of analysis was the commercial banks while the unit of observation was management. Data was gathered using self-administered questionnaire then analyzed using Statistical Package for Social Sciences (SPSS Version 25.0) software. Descriptive statistics such as frequencies, percentages and mean and inferential statistics such as correlation coefficient was used to analyze quantitative data. Charts, tables and graphs will be used to present the data. The study established that innovations capability positively and significantly affects performance. The study revealed that innovation capability is an important requirement for the effective management of inventions and creativity and the introduction of transformative technologies. The study recommends that in an era of faster competition and digitization, commercial banks in Nairobi City County, Kenya must increase their innovation capability. New innovations easily adopted in organizations enables banks to adjust to meet new customer needs and market changes. Innovation also enables creation of new products and services from time to time. Innovation capability of an organization affects organizational performance as it determines organization’s productivity and effectiveness.enDynamic CapabilityInnovation CapabilityOrganizational PerformanceArticle