Vol. 14(1), pp. 24-32. , 2026.

ISSN: 2384-6151

https://doi.org/10.14662/ijebm2026020

 

 

Full Length Research

 

Effect of Innovation Capability on the Performance of Micro, Small, and Medium Enterprises (Msmes) In Ogun State, Nigeria.

 

*1Samuel Babatunde Taiwo, 2Virginia Kassah and 3Barnabas Barde

 

1,2 &3 Department of Business Administration Faculty of Administration and Management Sciences, Bingham University, Karu, Nasarawa State. , 2E-mail: virginia.kassah@binghamuni.edu.ng 3E-mail:Bardebarnabas@gmail.com  

*Corresponding author’s E-mail: taiwo_tsb@yahoo.com  

 

 

Accepted 16 March 2026

Abstract

 

Innovation capability has emerged as a crucial determinant of business competitiveness and sustainability, particularly among micro, small, and medium enterprises (MSMEs) that contribute to Nigeria’s economy. This study examined the effect of innovation capability on the performance of MSMEs in Ogun State, Nigeria, with emphasis on three key dimensions; product innovation capability, process innovation capability, and marketing innovation capability. A descriptive survey research design was adopted, and structured questionnaires were distributed to a sample of 440 MSME owners and managers, determined using Taro Yamane’s (1967) formula and adjusted for a 10% attrition rate and proportionally allocated across sectors and enterprise sizes using Bowley’s formula to ensure representativeness. Out of the distributed questionnaires, 398 valid responses were retrieved and analysed using SPSS version 28 through descriptive statistics, correlation, and multiple regression analysis. The findings revealed that all three innovation capability dimensions had significant positive effects on MSME performance, with product innovation capability exerting the strongest influence, followed by process and marketing innovation capabilities. The model explained 64.2% of the variation in firm performance, indicating that innovation capability plays a substantial role in improving profitability, efficiency, and customer satisfaction among MSMEs in Ogun State. The results support Schumpeter’s Theory of Innovation, which emphasize innovation as a strategic resource for competitive advantage and adaptability. The study concludes that developing innovation capability is essential for enhancing MSME performance and sustaining competitiveness in a dynamic business environment. It recommends that MSMEs in Ogun State invest in continuous product development, process improvement, and modern marketing practices, while government agencies strengthen innovation support policies, funding, and training initiatives to promote sustainable enterprise growth.

 

Keywords: Innovation capability, product innovation, process innovation, marketing innovation, firm performance.

 

Cite This Article As: Taiwo, SB., Kassah, V., Barde, B. (2026). Effect of Innovation Capability on the Performance of Micro, Small, and Medium Enterprises (Msmes) In Ogun State, Nigeria. Inter. J. Econ. Bus. Manage. Vol. 14(1), pp. 24-32.