An Assessment of the Impact of Barriers on Eco-Innovation Within Small and Medium-Sized Manufacturing Firms in the Peripheral Regions of Lagos

Abstract

Small and medium-sized manufacturing firms are usually confronted with challenges of inadequate financial resources and lack of technological capabilities when compared with big firms. These challenges even become more critical when such firms are located in the peripheral regions of big business hubs. This study examines barriers that could limit the capability of small and medium-sized enterprises (SMEs) located in the peripheral regions of Lagos metropolis, to introduce eco-innovation. Using an evolutionary economic perspective and innovation theory, the study categorized obstacles to eco-innovation among the SMEs as costs, technological capability, market, organizational culture, and regulatory barriers. Results from the ordinal probit regression analysis indicate that technological and regulatory barriers have positive effects on eco-innovation among SMEs in the peripheral regions of Lagos metropolis. Firms that see barriers as opportunities often tend to realize more successful eco-innovations. Firm’s characteristics such as the deep search for external knowledge and the sector of the firm also have positive effects on the introduction of eco-innovation among the firms. The policy implications of these results are discussed in the chapter.