FIRM RESOURCES, REGULATORY FRAMEWORK, AND INTERNATIONALIZATION OF MEDIUM-SIZED EXPORT PROCESSING ZONE COMPANIES IN KENYA

Abstract

Business opportunities globally are rapidly increasing the establishment of new emerging markets which
poses challenges of internationalization to Medium-Sized Enterprises (MSEs), The MSEs has less
experience as compared to Multi-National Corporations (MNCs), and thus must consider a different
internationalization growth paths. The interest towards internationalization of MSEs and their activities
has grown mainly in those nations that are experiencing deficits in the balance of payment thus creating
the need to boost the international vitality of MSEs with aim to be multinational establishments in the
future. Internationalization can be used as a platform, however it is a risky venture that can result into
huge losses that may affect the firm’s long-term survival. Internationalization thus requires more
resources for mitigation. The research objective was to determine the effect of regulatory framework on
the relationship between firm resources and internationalization of medium-sized export processing zone
companies in Kenya. The study used a descriptive cross sectional study design. The research population
comprised of 104 companies in the Export Processing Zones (EPZs). The study employed a census where
the whole population was studied. The research targeted key decision makers; like the CEOs, founders,
or senior managers. Primary data collected via a closed ended questionnaire utilizing a five-point likert
scale was used. The current research was a cross-sectional study. The research used both descriptive and
inferential statistics including multiple and hierarchical linear regression analyses. The study findings
enumerated that regulatory framework has a significant moderating effect on the relationship between
firm resources and firm internationalization.
Key words: Firm Internationalization, Firms Resources, Regulatory Framework, Medium-Sized Firms,
Export Processing Zone.