Journal of Management Research
Year : 2023, Volume : 23, Issue : 1
First page : ( 41) Last page : ( 50)
Print ISSN : 0972-5814. Online ISSN : 0974-455X.

Competition and Innovation in Nigeria’s Manufacturing Industry: A Cause-Effect Relationship

Dahunsi Olusola Joseph

Lecturer in Department of Economics, Kola Daisi University, Ibadan, Nigeria

Online Published on 22 August, 2023.

Abstract

This study establishes the direction of causality between competition and innovation in Nigeria’s manufacturing industry. Using the panel VAR Granger causality approach, this study employed secondary data obtained from forty-three (43) quoted manufacturing firms operating in consumer (food, beverages and tobacco), industrial and health (pharmaceutical) sectors to investigate the cause-effect relationship between competition and innovation. The results showed that a reversed causality exists between competition and innovation. In support of the behavioural school of the structure-conduct-performance paradigm, the study showed that causality runs from innovation to competition with respect to capital intensity among manufacturing firms. In addition, the study showed the existence of causality from capital intensity to competition, and innovation. The findings of this study have important policy implications for implementing more innovative ways/methods in the manufacturing industry to achieve industrial competitiveness and innovation-driven productivity in Nigeria’s manufacturing industry.

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Keywords

Capital Intensity, Competition, Innovation, Causality.

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