Determinants of micro and small enterprises growth in Kenya
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 20 February 2017
Abstract
Purpose
The purpose of this paper is to investigate the effects of investment climate and firm-specific variables on the growth of micro and small enterprises (MSEs) in Kenya.
Design/methodology/approach
The paper utilized a cross-section survey data of 2,536 MSEs in Kenya. Using the sales growth as the dependent variable, the paper tests the hypotheses that investment climate variables – entrepreneur perception of fairness and affordability of the courts in dealing with commercial disputes, access to formal credit, connections to utilities, crime incidences; and firm-specific resources affect MSE growth.
Findings
Positive entrepreneur perception of the fairness and affordability of the courts, access to formal credit, connections to utilities, lower incidences of crime, entrepreneur education and experience positively affect MSE growth.
Research limitations/implications
Although the context of the study is Kenya, the study has relevance to other developing countries especially Sub-Saharan Africa due to institutional similarities. The paper, however, uses cross-sectional data, which unlike panel data, do not allow for establishing dynamic relationships. This could be a potential area for further research.
Originality/value
The paper is among the first to establish effects of entrepreneur perception on MSE growth with regards the court system in dealing with business disputes in terms of fairness, timeliness, affordability and enforcement. The paper also extends limited extant research on MSE growth constraints with regards to incidences of insecurity, access to bank credit, connections to utilities and internal resources.
Keywords
Citation
Shibia, A.G. and Barako, D.G. (2017), "Determinants of micro and small enterprises growth in Kenya", Journal of Small Business and Enterprise Development, Vol. 24 No. 1, pp. 105-118. https://doi.org/10.1108/JSBED-07-2016-0118
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited