Relationship Between Strategic Renewal and Business Performance through the Mediating Effect of Digital Innovation in Selected Family Business in Nigeria

Abstract

Family businesses play a vital role in the Nigerian economy, contributing significantly to job creation and gross domestic product (GDP) growth. Despite their importance, family-owned enterprises face challenges that can impact their business performance. This study investigates the mediating effect of digital innovation in the relationship between strategic renewal and business performance in selected family businesses in Kogi State, Nigeria. The research adopts a cross-sectional research strategy and gathers data from a representative sample of 426 family business owners using structured questionnaires. The study employs Structural Equation Modelling (SEM) to analyze the data and test the proposed mediating effect. The findings demonstrate that strategic renewal has a significantly positive effect on business performance and digital innovation mediates the relationships. The study contributes to the literature on family business performance and highlights the importance of digital innovation as a mechanism for enhancing the impact of strategic renewal on business performance in the Nigerian context. It therefore recommends that family businesses in Nigeria should invest in digital innovation and technology adoption to streamline their operations, improve efficiency, and enhance customer experiences.