Competitive Intensity and Performance of ICT Firms in Nigeria: The Mediating Effect of Innovation Investment

The peculiar trajectory and performance implications of competition on firms operating in Nigeria’s ICT sector motivated this research. The main objective of this study was to determine the mediating effect of innovation investment on the relationship between competitive intensity and performance of ICT firms in Nigeria. The ex-post facto research design was adopted in the study. Secondary data were obtained from the annual reports of the 8 listed ICT firms from 2012 to 2023. Data were analyzed using descriptive statistics while the random effect regression result was used to test the hypotheses. The result revealed that there was an insignificant negative relationship between competitive intensity and performance of listed ICT firms in Nigeria (t 0.05 = -0.048869, p = 0.9612, p > 0.05). The result also showed a significant positive relationship between competitive intensity and innovation investment of the firms (t 0.05 = 2.628492, p = 0.0103, p < 0.05). However, in contrast with many previous studies, the result showed that innovation investment had a significant positive relationship with the firm performance (t 0.05 = 1.613793, p = 0.1107, p < 0.05). Following the output of the Sobel test, it was concluded that innovation investment partially mediates the relationship between competitive intensity and performance of ICT firms. It was recommended that, as part of efforts towards mitigating the negative effect of competition, ICT firms in Nigeria should adopt a long-term perspective on innovation investment and also ensure that they complement that with robust implementation strategies that will enhance their performance.