Developing an Original Theory of Adaptive Business Model Innovation in Emerging Market Firms: Evidence from Nigerian Manufacturing and Services Sectors

Business model innovation theory has been developed primarily in advanced economy contexts, and its application to emerging market firms, which must navigate institutional voids, resource constraints, and infrastructure deficiencies, requires original theoretical development that this study provides through evidence from Nigerian manufacturing and services firms. This study develops an original Adaptive Business Model Innovation Theory (ABMIT) for emerging market firms, drawing on dynamic capabilities theory, institutional theory, and complex adaptive systems thinking to explain how Nigerian firms continuously redesign their business models in response to a volatile institutional and competitive environment. Theory development proceeds through a multi-phase grounded theory methodology, based on longitudinal case studies of 12 Nigerian firms across manufacturing, financial services, and digital sectors, with data collected through 180 semi-structured interviews, management observations, and document analysis over 36 months. The ABMIT identifies four original adaptive mechanisms: Institutional Arbitrage Adaptation (exploiting inconsistencies across formal and informal institutional rules), Resource Bricolage Recombination (creatively combining available constrained resources into novel value configurations), Customer Co-evolution (continuously updating value propositions in dialogue with evolving customer contexts), and Ecosystem Orchestration (managing external partner networks to access missing capabilities and market reach). The theory generates testable propositions validated through a subsequent survey of 200 Nigerian firms using structural equation modelling. All four mechanisms are confirmed as significant predictors of business model innovation outcomes. The ABMIT constitutes an original theoretical contribution to business model innovation literature for emerging market contexts.

Keywords: business model innovation, emerging markets, dynamic capabilities, grounded theory, Nigeria