Determinants of firms innovation in Nigeria

Abstract

Nowadays with rapid changes in the business world, companies all over the globe are increasingly including innovation as one of their strategies to ensure business expansion and profitability. This study examined the determinants of a firm's innovation in Nigeria. The study utilized enterprise survey data developed by the World Bank, which were analyzed using probit and tobit regression models. The findings showed that investing in research and development (R&D), formal training, a firm's size, exporting status, competitors, location, type and sector, or activity of firms all positively drive the propensity of a firm to innovate. It was however established by the study that the firm's age and employee education negatively affect the chances of innovation. Equally it was found that almost the same factors (investing in R&D, formal training, a firm's size, type, and sector) were the significant determinants of product, process, organizational, or marketing innovation. Thus, the policy implications of the findings are that firms should make the significant factors their top priorities in their quest to boost innovation.