This study critically analyzes the innovation types and the effect on the performance of the leather based manufacturing enterprise in Abia state. The study has four specific objectives which were to examine the socio economic characteristics of the respondents, analyses of the various types and strategies of innovation, the effect of innovation on the performance of the enterprise as well as the determinant of innovation and performance. Random samples of 120 leather based manufacturing firms were obtained and the data were collected using a well-structured questionnaire. The tools used for data analysis were tables, frequencies and percentages, correlation analysis, probit regression and multiple regression analyses. It was observed that the innovations used to enhance performance among leather based agro-industries were product, market and technological innovations. Specifically, innovation has a positive significant effect on the performance (profit) of the enterprise. The significant determinants of innovation were enterprise size, competitors, output level, and credit availability for the venture and education status of firm operators. Also, while innovation was one of the significant determinants of enterprise performance, it is therefore recommended that the enterprise should embark on a continuous innovation to enhance their performance
Keywords: Leather Enterprises, Nigeria, Performance Abia State, SMEs
