Innovation and Performance of Quoted Companies in Nigeria: An Empirical Analysis

Abstract

Firms across sectors face competitive and dynamic environments, necessitating a modern and innovative mindset to compete. Research indicates that specific innovation activities significantly impact firm performance. This study examined the innovation and performance of quoted companies in Nigeria, using data from the 2023 annual financial statements of 40 randomly selected firms from the Nigeria Exchange Group. Performance was measured by the current ratio, while the independent variable, innovation outcomes was assessed using an innovation index (II). The II was calculated based on the presence (score of 1) or absence (score of 0) of product, process, organization, and marketing innovations, with a maximum score of 4. Data analysis involved checking for outliers and linearity, followed by estimating the model parameters using the ordinary least square method of linear regression. Results revealed a strong positive relationship between innovation and performance. The study concluded that comprehensive creativity and innovation are essential for firm success. It recommended that companies prioritize innovation to remain competitive, expand through increased patronage, and enhance profitability. Furthermore, innovation should be a key factor in evaluating the performance of quoted companies in Nigeria.