Firms have to keep innovating if they want to maintain competitive advantage; hence, this study investigates the innovation activities in Nigerian firms considering the role Nigeria plays in the African economy. Specifically, the objectives of this study are to (1) to determine the factors that affect firms’ innovative activities and (2) to evaluate the impact of the innovative decision on innovation performance or product of firms. 2014 Enterprise survey data conducted by the World Bank is used, and CDM-model is adopted as the method of analysis. The results showed that improved supporting activities by firms has a significant positive relationship with firms’ innovative performance, and giving employees time to develop new idea has a positive impact on innovation performance. Finally, the study recommends that firms should embark on the job training of staff because it will help them be more efficient by improving the working process.