INNOVATION AND PRODUCTIVITY IN MICRO, SMALL AND MEDIUM ENTERPRISES IN NIGERIA

The aim of this paper is to investigate the determinants of innovation activities and their impact on MSMEs productivity in Nigeria. For the empirical analysis of the study we employ Business Environment Enterprise Performance Surveys (BEEPS) firm-level data. To examine the relationship between innovation activities and MSMEs productivity. The ordinary least square technique was used to determine the relationship between innovation activities undertaken by entrepreneurial businesses and their performance. Our findings suggest that enterprises’ size, ownership structure, competition, technological improvement and international impact have positive and significant impact on their incentive to undertake innovation activities. Considering the determinants of productivity, the study reveals that enterprises that have undertaken innovation activities, infrastructural development and purchases of new assets have a positive relationship with productivity but does not affect productivity. The study recommends that MSMEs must make there presence felt more in the international market and more should be invested more on researc and development in order to ascertain what brings about productivity in MSMEs.