THE JOINT INFLUENCE OF FIRM RESOURCES AND ORGANIZATIONAL CHARACTERISTICS ON EXPORT PERFORMANCE OF SMALL AND MEDIUM MANUFACTURING ENTERPRISES IN NAIROBI COUNTY, KENYA

Abstract

The main objective of this study was to determine the joint influence of firm resources
and organizational characteristics on export performance of small and medium
manufacturing enterprises in Nairobi County, Kenya. A conceptual model was developed,
and corresponding hypothesis formulated to test the influence of firm resources and
organizational characteristics on export performance. The study was anchored on three
theories; the Resource Based Theory, Porters Theory of competitive advantage, and Firm
Internationalization Theory. The research design was a cross-sectional survey of 265
companies in Nairobi City County, chosen from a population of 853 companies. The unit
of analysis was the small and medium manufacturing enterprises involved in exporting.
Out of the 265 firms sampled, 238 completed the questionnaire resulting in 89.1 percent
response rate. Descriptive statistics were used to assess the key organizational
characteristics whereas multiple linear regression model was employed in estimation. A
five percent significance level was chosen when testing the significance of the coefficients
as well as joint significance. The findings revealed that firm resources and organizational
characteristics jointly influence export performance of SMEs in manufacturing. Based on
the findings, the study recommends to the national and county governments to formulate
legislation and policies that promote exporting by small and medium-sized enterprises in
manufacturing, by reviewing required firm resources and internal firm characteristics
for successful exporting. Also, the study suggests for increased government initiatives to
address the challenges faced by manufacturing SMEs via enforcing legislation on local
content for public projects, as well as establishing ‘Buy Kenya, Build Kenya’ policies in
public procurement, research and development support in addition to increased
contributions to special ‘kitty’ meant to support those engaged in manufacturing sector.