Influence of Transactional Leadership on Product Innovation Among MSMES in South East, Nigeria

Abstract

This study examined the influence of transactional leadership on product innovation among MSMEs in South East, Nigeria, with the specific objective of determining the extent to which transactional leadership practices affect product innovation. A survey research design was adopted, and the population comprised 5,283,034 MSMEs across the five South East states, from which a sample size of 400 was determined using Taro Yamane’s formula and selected through stratified sampling. Primary data were collected using a structured questionnaire measured on a 5-point Likert scale, while the instrument’s validity and reliability were established through expert judgment and Cronbach’s alpha test, respectively. Hypothesis was tested using regression analysis with the aid of SPSS V. 26, where transactional leadership was modelled as the independent variable and product innovation as the dependent variable. The finding revealed that transactional leadership has a significant positive influence on product innovation among MSMEs in South East Nigeria (β = 0.548, p = 0.000). The study concluded that structured supervision, performance monitoring, and reward systems enhance product innovation. Therefore, managers should implement clear performance expectations, structured task assignments, and reward systems to reinforce product improvement efforts, as such practices have a measurable positive effect on incremental innovation.