Today, the higher education sector in developing countries is facing challenges from a dynamic environment characterised by rapid technological change and increased demand. As innovation becomes critical to the survival of organisations, transformational leadership (TL) has been found to have an important influence on innovation, leading to increased goal-directed behaviour on the part of followers, promoting organisational change, and a spirit of trust, and helping followers to exceed their performance expectations. Knowledge and knowledge sharing are recognised as the most significant resources for competitive advantage and the key to enhancing innovation. It has been shown that knowledge management and the promotion of knowledge sharing among the members of an organisation are an important part of the learning process as they help to convert the tacit knowledge embedded in individuals into explicit knowledge through interaction. Prior literature has pointed out that transformational leadership is one of the most important factors affecting knowledge sharing and enhanced innovation in an organisation. However, there is a lack of models linking transformational leadership, knowledge sharing, and innovation within higher education institutions (HEIs) in general within developing countries, particularly Iraq. This study sought to examine the impact of transformational leadership on innovation through the mediating role of knowledge sharing, and the differences between these impacts in public and private HEIs in Iraq. A mixed-methods approach was taken (quantitative and qualitative) and 486 (253 public and 233 private) valid responses were collected to test the causal relationships between transformational leadership, knowledge sharing, and innovation. Then, 10 interviews were conducted with the leaders of HEIs to explain the unexpected findings from the quantitative stage regarding the differences in transformational leadership practice and the effect relationships. Employing structural equation modelling (SEM) with AMOS 20, the study found that knowledge sharing plays a pivotal role in the relationship between transformational leadership and innovation, and that transformational leadership would be ideal in an educational context, promoting knowledge sharing activities and influencing innovation in both the public and the private sector. The multi-group SEM and the interviews revealed similarities and differences between Iraqi public and private HEIs in terms of the effect relationships. The findings contribute significantly to the theory on the mediating role of knowledge sharing in supporting the relationship between transformational leadership and innovation. They also provide a better understanding of these relationships in the educational environment within developing countries, specifically Iraq, a context that has been neglected in previous studies. The study has further detected sector-based differences, and similarities in terms of the transformational leadership exhibited, and has provided a clearer picture of the status of the HEI system in Iraq. Regarding practical implications, the findings show that leaders in higher education who are looking to establish strategies for achieving innovation would benefit from expending their efforts on promoting knowledge-sharing practices among their teaching staff.

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