The Effect of Informal Food Service Operators’ Capabilities on Their Performance in Nigeria

Abstract

Technology has become crucial for businesses of all scales, enhancing operational efficiency, customer experience, and overall performance. While many formal businesses have embraced technology, small and informal businesses, particularly in rural areas, often struggle with adoption due to resource constraints. This study examines the impact of technological capability (TC) on the performance of informal food service operators (IFO) in southwestern Nigeria. This study employed a quantitative approach whereby a closed-ended questionnaire was administered to 180 IFOs across different LGAs in Oyo State to elicit information about the effect of their activities on performance indicators. The response rate was 93.8%. Data was analyzed using a binary logistic regression model. Findings revealed that the innovation capability (β—1.657; p—0.003*) and production capability (β—3.276; p—0.009*) of the IFOs significantly influenced their sales turnover and profit level is influenced by innovation capability (β—1.657; p—0.013*), investment capability (β—2.013; p—0.004*) and linkage capability (β—2.716; p—0.003*) within the study area. The study recommends that there should be strong linkages between the operators and technology-providing organisations to enhance their innovation capability.