RP-Department of Applied Economics

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Browsing RP-Department of Applied Economics by Author "Gachanja, Paul"

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    Factors influencing micro and small enterprise’s decision to innovate in Kenya
    (Springer Nature, 2018-12-08) Njiraini, Peter; Gachanja, Paul; Omolo, Jacob
    An enterprise’s propensity to innovate has been recognised to have an important bearing on its performance. In Kenya empirical work on micro and small enterprises (MSEs) propensity to innovate is still nascent in spite of the pivotal role played by these enterprises in the economy. The current paper used a Probit econometric model to analyse factors that influence MSE’s decision to innovate or not. Results from the analysis show that the average number of years of education for a production worker, physical capital intensity, age of an MSE, access to finance and size of an MSE are important factors influencing MSEs innovation decisions. Higher foreign ownership and manager’s experience were found to act as hindrances towards MSEs’ decision to innovate. Based on the study findings it is clear that human capital skills and an MSE’s resource endowment positively influences MSEs innovativeness. From a theoretical perspective, there is need for skills segmentation to isolate human capital skills that are most relevant for stimulating MSEs innovative activities. Firm level and policy level strategies are also needed to improve the technical skills of the average MSEs’ production workers across the country. Subsidisation of physical capital and financial services for MSEs should also be used to promote these enterprises innovativeness.
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    Innovation and Micro and Small Enterprises Growth Performance: Evidence from Kenya
    (International Organization of Scientific Research, 2018-10) Njiraini, Peter; Omolo, Jacob; Gachanja, Paul
    The role that innovation can play towards the growth and survival of an enterprise continues to gain credence as better indicators of enterprise innovativeness come to the fore. In spite of this growing body of knowledge, micro and small enterprises in Kenya continue to experience high mortality rate. This paper used World Bank Enterprise Survey data for Kenya to probe whether innovative micro and small enterprises are indeed associated with better growth performance. The study used a qualitative analysis using a descriptive analysis and t-test for mean differences to compare innovative and non-innovative micro and small enterprises. The results show that there was no statistically significant relationship between a micro and small enterprise’s growth performance and its innovativeness. Innovative micro and small enterprises were, however, found to have invested relatively higher resources towards innovation inputs and hiring of advanced human skills. They also participated in export trade. The results seems to suggest that innovative micro and small enterprises’ investment were either too marginal to make a difference or the investments dissipated along the innovation chain.
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    Innovative adaptation and operational efficiency on sustainable competitive advantage of food and beverage firms in Kenya
    (European Centre for Research Training and Development UK (www.ea-journals.org), 2015-02-24) Gachanja, Paul; Minja, David; Mutunga, Stephen Laititi
    The idea that an organization’s members are the real source of its competitive advantage has long been acknowledged. The significance of human capital as a determinant of firm performance is gaining recognition in the strategic management literature, and the need for relating employee talent to a firm’s competitive advantage is continuing to develop in the human resource management arena hence the drive to establish superior human capital to generate competitive advantage Many firms have explicitly embraced competitive strategies to gain and maintain a lead in their industries. In all the competitive strategies firms have engaged in, human capital has been the driver of competition. This study endeavoured to empirically test the effects of human capital and especially in innovation and operational efficiency in according food and beverage firms the requisite competitive advantage in the very dynamic industry. the study sought to answer the following research question: What are the effects of human capital (in innovative adaptation and dynamic operational efficiency) on firms’ ability to attain sustainable competitive advantage within the F & B companies in Kenya? This research entailed a descriptive study design. This study sought to do that among the F & B firms in Kenya. The study was concerned with describing the characteristics of a unique group of food and beverage firms and their competitiveness. From the study, 87 percent of respondents indicated concurrence on usefulness of human resources for SCA. Kenyan firms in the food and beverage industry therefore highly regard human capital as a major contributor to sustainable competitive advantage. The study established that internal processes largely rely on how capabilities are harnessed for competitive advantage.