(IP Publishing Ltd, 2010) Njehia, Bernard K.; Mshenga, Patience M; Richardson, Robert B.; Birachi, Eliud A.
Tourism is an increasingly important economic sector in many developing countries. In Kenya, it represents the second greatest contribution to gross domestic product (GDP) after agriculture. Data from a survey of 449 micro and small enterprises (MSEs) in coastal Kenya were used in a modified Evans growth model to examine the contribution of tourism to the growth of farm and non-farm MSEs. The authors also examined the influence of entrepreneur and business characteristics on the growth of farm and non-farm MSEs along the Kenyan Coast. The age of the business, business income, marital status, number of employees and form of business organization were found to influence MSE growth significantly. Tourist spending and activities were also found to have a significant effect on MSE growth. The results have implications for the role of tourism in economic development, small business growth and poverty alleviation.