EFFECT OF STRATEGIC ENTREPRENEURIAL ORIENTATION ON GROWTH OF SELECTED KENYAN EXPORT FIRMS

Abstract

Kenya adopted an export led growth of economic development following the paradigm shift in trade policy, from an inward to an outward approach documented in Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth. This policy orientation is further justified in Kenya Vision 2030 that foresees trade as a key contributor to economic growth target rate of 10% per year. Despite adoption of the policy, export firms still do not achieve optimal growth and competitive levels that is envisaged to facilitate industrial progress in Kenya. The foregoing motivated the undertaking of this study. This research thus sought to examine effects of strategic entrepreneurial orientation on growth of selected Kenyan export firms. The objectives of this study were: To examine the effect of innovation on growth of selected Kenyan export firms; to examine the effect of risk taking propensity on growth of selected Kenyan export firms; and to examine the effect of adoption of marketing mix on growth of selected Kenyan export firms; to examine the effect of networking on growth of selected Kenyan export firms. This study also sought to establish the moderating effect of political and regulatory framework on the effect of strategic entrepreneurial orientation on growth of selected Kenyan export firms. This study was based on entrepreneurship theories namely; Psychological, Economic and Discovery, and creation alternative theories of entrepreneurial action. The study applied the survey research design. The target population consisted of 770 export firms registered by Export Promotion Council. The sample for the study was identified by using purposive and stratified random sampling techniques. The sample frame was stratified into seven subsectors. The sample size was 169 export firms. Data was collected using structured questionnaire. The study adopted descriptive, inferential data analysis, and Structural Equation Modelling Methods. The study employed Bootstrap its confidence intervals results indicated an optimum confidence interval, hence considered to yield more accurate values than percentile. Most of the variables indicate a 100 (1-p) % confidence interval. Innovation split model yielded Ratio Index (20.013) p<0.05 indicating a significant difference, innovation split model had Ratio index (2.224) - less than 5 though larger than marketing mix model. In comparison, innovation and marketing mix models differ indicating that the parameters worsened for Innovativeness. A percentage error difference of 10% on error difference, while a 1 % marketing mix is effective compared to Innovation model in favour of the Marketing. Results indicate a strong effect of marketing mix on growth of export firms and a low correlation between innovation and growth of export firms. Marketing Mix loaded higher than innovation in support of growth of export firms. The dimensions of strategic entrepreneurial orientation were positively related to growth of export firms. Growth of export firms is likely to be enhanced, from the perspective of both theoretical mechanism and empirical analysis. Innovative collaboration with foreign partners is likely to increase firms‘ capability to export to other countries, as marketing mix could contribute to meeting the local demand for different products. This study contributes to knowledge, in that the conceptual framework and innovative Achola Ogundo Split growth of export firm‘s model can be applied by other researchers. This study recommends that government of Kenya develops a national entrepreneurship policy, to focus attention on developing innovation capacity, future research to address whether risk taking that lead to growth of export firms among surviving firms is also associated with risk of failure of firms. A longitudinal investigation would allow the firms to be studied over a period of time and provide further insights into the dynamic nature, of the relationship between variables.