Growth Strategy, Technological Innovation and Performance of Manufacturing Firms in Southwest Nigeria

Abstract

Growth strategy is critical to the performance of small and medium enterprises (SME) in an economy. This study examined the moderating effect of technological innovation on growth strategy and performance of SMEs. It adopts quantitative approach, and used 361 copies of questionnaire were distributed among SME owners in Southwest Nigeria and analysed with Structural Equation Modelling (SMART PLS). Results shows significant relationships between growth strategy and SMEs performance and technological innovation reinforces the relationships. It indicates that product development has 78% predictability on performance of SME, also 58% of variance in performance of SME is explained by market penetration. Market development has 73% predicting effect on performance of SME, and also that 70% of variance in performance of small and medium enterprise is explained by product diversification. It is recommended that owners of SMEs should invest in quality and diversified products, and invest in research and development that encourages intrapreneurship