Citation:

Olawore, O. P., Oyelade, K. A., Tairu, O. A., Oduwole, W. K., Awofala, H. T.. "Entrepreneurial Innovation and Market Share of Small and Medium Enterprises in Lagos State, Nigeria" International Research Journal of Economics and Management Studies, Vol. 3, No. 10, pp. 65-75, 2024.

Abstract:

Entrepreneurial innovation is a vital driver of market share growth for SMEs in Lagos State, Nigeria. By adopting innovative practices, leveraging technology, and fostering a culture of continuous improvement, SMEs can enhance their competitiveness and achieve sustainable business success. However, few studies are available on effect of entrepreneurial innovation on market share of SMEs in Nigeria, therefore creating a gap that requires urgent research attention. More so, it is observed that SMEs owners/managers in Nigeria are unable to tap new markets and ease accessibility of their products and services, which may probably be as a result of lack of marketing innovation to carry out various changes in their product design, product packaging and also lagging behind in product promotion and pricing to address customers’ needs. Based on the above rationale, the research study, therefore, examined the influence of dimensions of entrepreneurial innovation on the market share of selected SMEs within Lagos State, Nigeria. This study adopted a cross-sectional survey research design. The population to carry out the study comprised 42,067 owners/managers of SMEs in Lagos State, Nigeria. Cochran’s formula was used to find out a sample size of 495. A simple random sampling technique was carried out on respondents. Data collection was carried out using a structured and validated questionnaire. The reliability test achieved Cronbach’s alpha of 0.716 to 0.879 for the constructs. There was an attainment of 92.5% response rate. Multiple linear regression statistics was employed to put the hypothesis into testing on 5% significance level. The results presented that entrepreneurial innovation had a significant effect on market share (Adj.R2= 0.537, F(4,398)= 117.35, p < 0.05). The study of entrepreneurial innovation dimensions concluded that it significantly affected the market share of selected SMEs in Lagos State, Nigeria. The recommendation presented is the fact that small and medium-sized enterprises operating in Lagos State should work towards actively cultivating and nurturing a culture of entrepreneurial innovation within their organizational frameworks. All this needs is a mindset that tolerates, encourages, or allows creativity, risk-taking and experimentation within the front lines among the employees.

References:

[1] Abdallah, S. B., El–Boukri, S., Floricel, S., Hudon, P. A., Brunet, M., Petit, M. C., & Aubry, M. (2022). A process-oriented framework to measure development performance and success of megaprojects. International Journal of Project Management, 40(6), 685-702.
[2] Adamu, U. G., Hussin, S. R., Ismail, N. A. (2020). Effect of marketing innovation on performance of Small and Medium Enterprises in Nigeria. International Journal of Innovation, Creativity and Change, 11(12), 353-370.
[3] Afriyie, S., Du, J., & Ibn Musah, A. A. (2019). Innovation and marketing performance of SMEs in an emerging economy: The moderating effect of transformational leadership. Journal of Global Entrepreneurship Research, 9(40), 1-25.
[4] Aina, D. (2024, October 3). BOI disburses N77.56bn loans to 1,000 MSMEs. Punch. https://punchng.com/boi-disburses-n77-56bn-loans-to-msmes/
[5] Alghanmi, A. O. (2020). Innovations as the competitive advantage for small and medium enterprises: The case for the Kingdom of Saudi Arabia. 2, 196– 205. doi.org/10.21272/mmi.2020.2-14
[6] Al-Shami, S., Al-Hammadi, A. H., Al- Hammadi, A., Rashid, N., Al-Lamy, H., & Eissa, D. (2019). Online social networking websites in innovation capability and hotels’ performance in Malaysia. Journal of Hospitality & Tourism Technology, 12(1), 72-84.
[7] Ataei, P., Karimi, H., Zarei, R. (2024). The role of entrepreneurial leadership, intellectual capital, innovativeness culture, and entrepreneurial orientation in entrepreneurial opportunity recognition by students Pouria. Journal of Open Innovation: Technology, Market, and Complexity, 10(2), 1-10.
[8] Bhatia, M. S. (2021). Green process innovation and operational performance: The role of proactive environment strategy, technological capabilities and organizational learning. Business Strategy and the Environment, 30(7), 2845-2857.
[9] Bigliardi, B., & Dormio, A. I. (2009). An empirical investigation of innovation determinants in food machinery enterprises. European Journal of Innovation Management, 12(2), 223-242.
[10] Birkinshaw, J., Hamel, G., & Mol, M. J. (2008). Management innovation. Academy of Management Review, 33(4), 825-845.
[11] Camison, C., & Villa-Lopez. A. (2010). An examination of the relationship between manufacturing flexibility and firm performance: The mediating role of innovation. International Journal of Operations & Production Management, 30(8), 853-878.
[12] Canh, N. T., Liem, N. T., Thu, P. A., & Khuong, N. V. (2019). The impact of innovation on the firm performance and corporate social responsibility of Vietnamese manufacturing firms. Sustainability, 11(13), 1-14.
[13] Chege, S. M., Wang, D., & Suntu, S. L. (2020). Impact of information technology innovation on firm performance in Kenya. Information Technology for Development, 26(2), 316-345.
[14] Cherrafi, A., Garza-Reyes, J. A., Kumar, V., Mishra, N., Ghobadian, A., & Elfezazi, S. (2018). Lean, green practices and process innovation: A model for green supply chain performance. International Journal of Production Economics, 206, 79-92.
[15] Cooper, R. G., & Edgett, S. J. (2010). Developing a product innovation and technology strategy for your business. Research-Technology Management, 53(3), 33-40.
[16] Cowan, K. M., Haralson, L. E., & Weekly, F. (2009). The four key elements of innovation: Collaboration, ideation, implementation and value creation. https://bit. ly/3hpKf4j.
[17] Damanpour, F., & Aravind, D. (2012). Managerial innovation: Conceptions, processes and antecedents. Management and Organization Review, 8(2), 423-454.
[18] Daniel, C. O. (2018). Effect of marketing strategies on organizational performance. International Journal of Business Marketing and Management, 3(9), 1-9.
[19] David, F. L. S., Leonardo, F. C., Herbert, K., & Eduardo, K. K. B. (2014). Innovation efforts and performance of Brazilian firms. Journal of Business Research, 67(4), 527-535.
[20] Dawes, J. (2006). Interpretation of brand penetration figures that are reported by sub-groups. Journal of Targeting, Measurement, and Analysis for Marketing, 14(2), 173-183.
[21] Deku, W. A., Wang, J., Danquah, E., & Narain, D. (2021). Correlation between business innovation environment (BIE) and entrepreneurial orientation dimension (EOD) on financial performance of manufacturing SMEs in Ghana. World Journal of Entrepreneurship, Management and Sustainable Development, 17(4), 787-803.
[22] Donbesuur, F., Ampong, G. O. A., Owusu-Yirenkvi, D., & Irene, C. (2022). Technological innovation, organizational innovation, and international performance of SMEs: The moderating effect of domestic institutional environment. Elsevier, 1-42. hdl.handle.net/10434/18173
[23] Edeling, A., & Himme, A. (2018). When does market share matter? New empirical generalizations from a meta-analysis of the market share–performance relationship. Journal of Marketing, 82(3), 1-24.
[24] Ellis, J. L. (2021). A test can have multiple reliabilities. Psychometrika, 86(4), 869–876.
[25] Farris, P. W., Bendle, N., Pfeifer, P., & Reibstein, D. (2010). Marketing metrics: The definitive guide to measuring marketing performance. Pearson Education.
[26] Fitzgerald, D., & Priolo, A. (2018). How do firms build market share? NBER Working Paper Series, National Bureau of Economic Research, Cambridge.
[27] Gamage, S. K., Ekanayake, E. M. S., Abeyrathne, G. A. K. N. J., Prasanna, R. P. I. R., Jayasundara, J. M. S. B., & Rajapakshe, P. S. K. (2020). A review of global challenges and survival strategies of small and medium enterprises (SMEs). Economies, 8(4), 1-24.
[28] Gault, F. (2018). Defining and measuring innovation in all sectors of the economy. Research Policy, 47(3), 617-622.
[29] Genc, E., Dayan, M., & Genc, O. F. (2019). The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation. Industrial Marketing Management, 82, 253-264.
[30] Gharghina, S. C., Botezatn, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and medium-sized enterprises (SMEs): The engine of economic growth through investment and innovation. Sustainability, 12(1), 1-22. doi: 10.3390/su12010347.
[31] Ghemawat, P. (2002). Competition and business strategy in historical perspective. Business History Review, 76(1), 37-74.
[32] González-Díaz, R. R., & Becerra-Perez, L. A. (2021, March). Stimulating components for business development in Latin American SMEs. In World Conference on Information Systems and Technologies (pp. 366-374). Cham: Springer International Publishing.
[33] Hamel, G. (2006). The why, what, and how of management innovation. Harvard Business Review, 84(2), 72-84.
[34] Hargrave, T. J., & Van De Ven, A. H. (2006). A collective action model of institutional innovation. Academy of Management Review, 31(4), 864-888.
[35] Homaid, A. A., Minai, M. S., & Al-Ansi, A. A. (2018). The effect of market and entrepreneurial orientation on the performance of microfinance institutions: The mediating role of learning orientation in the context of Yemen. Journal of Business & Retail Management Research, 12(3), 126-139.
[36] Hult, G. T. M., Hurley, R. F., & Knight, G. A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial marketing management, 33(5), 429-438.
[37] Ibidunni, A. S., Kolawole, A. I., Olokundun, M., & Ogbari, M. E. (2020). Knowledge transfer and innovation performance of small and medium enterprises (SMEs): An informal economy analysis. Heliyon, 6(8), 1-9.
[38] Jin, C., Liu, A., Liu, H., Gu, J., & Shao, M. (2022). How business model design drives innovation performance: The roles of product innovation capabilities and technological turbulence. Technological Forecasting and Social Change, 178(4), 121591.
[39] Kahn, K. B. (2018). Understanding innovation. Business Horizons, 61(3), 453-460.
[40] Karabulut, A. T. (2015). Effects of innovation types on the competitiveness of manufacturing firms in Turkey. Procedia-Social and Behavioral Sciences, 195, 1355-1364.
[41] Katuse, P., Ngari, J., & Owich, S. (2018). The strategy implementation and organizational performance of companies in Nairobi security exchange. European Journal of Social Sciences, 5(1), 37-48.
[42] Khantimirov, D. (2017). Market share as a measure of performance: Conceptual issues and financial accountability for marketing activities within a firm. Journal of Research in Marketing, 7(3), 587-592.
[43] Kiilu, J. M., & Kithae, P. P. (2020). Entrepreneurial innovation processes and firm performance in Kenya: A case of SMEsin Nairobi County. International Journal of Management and Leadership Studies,2(1), 48-58.
[44] Koellinger, P. (2008). The relationship between technology, innovation and firm performance empirical evidence from e-business in Europe. Research Policy, 37(8), 1317-1328.
[45] Akoma, L. O., Egwakhe, J. E., Egbuta, O. U., & Akinlabi, B. H. (2021). Innovation dimensions and market share of selected manufacturing SMEs in Ogun State, Nigeria. The International Journal of Business and Management, 9(4), 182-189.
[46] Mabenge, B. K., Ngorora-Madzimure, G. P. K., & Makanyeza, C. (2020). Dimensions of innovation and their effects on performance of small and medium enterprises: The mediating role of firm’s age and size. Journal of Small Business & Entrepreneurship, 34(1), 1-25.
[47] Milewski, S. K., Fernandes, K. J., & Mount, M. P. (2015). Exploring technological process innovation from a lifecycle perspective. International Journal of Operations & Production Management, 35(9), 1312-1331.
[48] Mohd, R., & Syamsuriana, S. (2013). The impact of innovation on the performance of small and medium enterprises: Evidence from Malaysia. Journal of Innovation Management in Small & Medium Enterprises, 2013, 1-16.
[49] Montanari, S., & Kocollari, U. (2020). Defining the SME: A multi-perspective investigation. Contextual Evolution Across Markets, Disciples and Sectors, 2(1), 62-82. https://doi.org/10.1007/978-3-030-45835-54
[50] Mothe, C., & Thi, T. U. N. (2010). The link between non‐technological innovations and technological innovation. European Journal of Innovation Management, 13(3), 313-332.
[51] Na, Y. K., Kang, S., & Jeong, H. Y. (2019). Effects of marketing orientation and performance of sharing economic business: Focus on market innovation and sustainable comparative advantage. Sustainability, 11(3), 1-19. doi: 103390/su1030729.
[52] Nguyen, T. H., & Pham, N. (2009). Information technology adoption in SMEs: An integrated framework. International Journal of Entrepreneurial Behavior & Research, 15(2), 162-186.
[53] Nguyen, V. T., Natoli, R., & Divisekera, S. (2021). Innovation and productivity in tourism small and medium enterprises: A longitudinal study. Tourism Management Perspectives, 38, 100804–100804. doi.org/10.1016/j.tmp.2021.100804
[54] Njagi, F. W. (2016). The effect of microfinance services on the financial performance of small and medium enterprises in Embu county, Kenya. https://www.semanticscholar.org/paper/The-effect-of-microfinance-services-on-the-of-small-Njagi/b0d1e5e753476a64f2416cc9f1f499fe42020a
[55] Nnorom, G., Ikponmwonba, P., & Enyinnaya, G. (2023). Innovation and competitiveness of selected small and medium-scale enterprises (SMES) in Lagos State, Nigeria. Adeleke University Journal of Business and Social Sciences (AUJBSS), 176-184. https://doi.org/10.5281/zenodo.7892373
[56] Ntiamoah, E. B., Li, D., & Sarpong, D. B. (2019). The effect of innovation practices on agribusiness performance: A structural equation modelling (SEM) approach. African Journal of Science, Technology, Innovation and Development, 11(6), 671-681.
[57] Odeyemi, O., Oyewole, A. T., Adeoye, O. B., Ofodile, O. C., Addy, W. A., Okoye, C. C., & Ololade, Y. J. (2024). Entrepreneurship in Africa: A review of growth and challenges. International Journal of Management & Entrepreneurship Research, 6(3), 608-622.
[58] Oduro, S. (2019). Impact of innovation types on SMEs’ performance in the Cape Coast Metropolis of Ghana. Journal of Entrepreneurship and Innovation in Emerging Economies, 5(2), 110-127.
[59] Okoi, I. O., Iheanacho, M. U., & Lawal, S. G. (2022). Analyses of macroeconomic drivers of stock market development in Nigeria. AKSU Journal of Management Sciences, 7, 29-42.
[60] Okoli, I. E. N., Nwosu, C. K., & Okechukwu, M. E. (2021). Entrepreneurial orientation and performance of selected SMEs in Southeast, Nigeria. European Journal of Business and Management Research, 6(4), 108–115. https://doi.org/10.24018/ejbmr.2021.6.4.946
[61] Olowoporoku, A. A., & Falana, R. (2020). Innovation and entrepreneurial performance: Evidence from selected family-owned businesses. International Journal of Scientific & Engineering Research (IJSER), 11(2), 451-468.
[62] Omagu, I. E., Asikhia, O. U., Akinlabi, H. B., & Makinde, G. O. (2021). Effect of bank innovation capability dimensions on market share of small and medium scale enterprises in Nigeria. World Journal of Innovative Research (WJIR), 10(4), 150-155.
[63] Olawore, O. P., Olayinka, K. A., & Akinkunmi, M. K. (2016). Small and medium enterprises’ Participation in government procurement contracts in Nigeria. International Journal of Management Science & Humanities (IJMSH), 4(1), 1-22.
[64] Opeyemi, O. (2024, July 10). Electricity reliability: When will the state wake up? BusinessDay, p. 11.
[65] Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403-441.
[66] Rahmah, M., Ameen, A., Isaac, O., Abu-Elhassan, A. E. E. S., & Khalifa, G. S. (2020). Effect of organizational innovation (product innovation, process innovation, and administrative innovation) on organizational learning. Test Engineering and Management, 82(1), 12101-12113.
[67] Rezvani, M., & Fathollahzadeh, Z. (2018). The impact of entrepreneurial marketing on innovative marketing performance of small-medium-sized companies. Journal of Strategic Marketing,
[68] 1-14.https://doi.org/10.1080/0965254X.2018.1488762
[69] Rosli, M. M., & Sidek, S. (2013). The impact of innovation on the performance of small and medium manufacturing enterprises: Evidence from Malaysia. Journal of Innovation Management in Small & Medium Enterprises, 2013, 1-16.
[70] Seng, B., Kaneko, H., Hirayama, K., & Katayama-Hirayama, K. (2011). Municipal solid waste management in Phnom Penh, capital city of Cambodia. Waste management & research, 29(5), 491-500.
[71] Shaligram, B. J. (2014). Organizational capability and their strategic impact on firm’s market share. International Journal of Scientific and Research Publication, 4(12), 1-4. https://www.ijsrp. org/research-paper-1214/ijsrp-p3632.pdf
[72] Small Business Administration (SBA). (2021). Small business outlook 2021: An economic update. https: //www.sba.gov/sites/default/files/advocacy/2021-Small-Business-Out.
[73] Stojcic, N., Hashi, i., & Aralica, Z. (2018). Creativity, innovation and firm performance in an emerging transition economy: EkonomskiPregled, 69(3), 203-228.
[74] Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.
[75] Teece, D. J., & Pisano, G. (2003). The dynamic capabilities of firms. In: Hollsopple, C. W.(eds) Handbook on Knowledge Management. International Handbooks on Information Systems, Springer, Berlin, Heidelberg.
[76] Teece, D. J. (2007). Explicating dynamic capabilities: The nature and micro foundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350.
[77] Tetteh, E. K., & Essegbey, O. G. (2014). Firm-level innovation: The case of Ghanaian firms. European Journal of Business and Innovation Research, 2(2), 1-18.
[78] Tresna, P. W., & Raharja, S. J. (2019). Effect of entrepreneurial orientation, product innovation and competitive advantage on business performance in creative industries in Bandung city, Indonesia. Journal of Integrative Business & Economic Research, 8(3), 51-60.
[79] Tuan, N., Nhan, N., Giang, P., & Ngoc, N. (2016). The effects of innovation on firm’s performance of supporting industries in Hanoi, Vietnam. Journal of Industrial Engineering and Management, 9(2), 413-431.
[80] Udriyah, J. T., & Ferdous-Azam, S. M. (2019). The effects of marketing orientation and innovation on competitive advantage and business performance of textile SMEs. Management Science Letters, 9, 1419-1428.
[81] Vivero, R. L. (2002). The impact of process innovations on firm’s productivity growth: The case of Spain. Applied Economics, 34(8), 1007-1016.
[82] Wadho, W., & Chaudhry, A. (2018). Innovation and firm performance in developing countries: The case of Pakistani textile and apparel manufacturers. Research Policy, 47(7), 1283-1294.
[83] Wellalage, H. N., Locke, S., & Samujh, H. (2020). Firm bribery and credit access: Evidence from Indian SMEs. Small Business Economics, 55(1), 283- 304.
[84] World Bank (2020). Nigeria in times of COVID-19: Laying foundations for a strong recovery. International Bank for Reconstruction and Development/The World Bank Washington DC20433. www.worldbank.org.
[85] Yelmi, A., Yahaya, Y., Muhammed, A., & Oyikwu, L. G. (2021). The impact of marketing innovation on the performance of small and medium enterprises in Nigeria. Socioeconomic Challenges, 5(3), 98-105. https://doi.org/10.21272/sec
[86] Zhang, Y., Khan, U., Lee, S., & Salik, M. (2019). The influence of management innovation and technological innovation on organizational performance; A mediating role of sustainability. Sustainability, 11,495, 1-21. doi:10.3390/su1020495

Keywords:

Entrepreneurial Innovation, Process Innovation, Product Innovation, Market Share, Management Innovation, Marketing Innovation.