Browsing by Author "Gacheru, Washington Mbuthia"

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    Trade Openness, Export Quality and Economic Growth Nexus in Kenya
    (THE INTERNATIONAL JOURNAL OF HUMANITIES & SOCIAL STUDIES, 2024-06) Gacheru, Washington Mbuthia; Gachoki, Charles
    Economic growth is a major concern for developing and underdeveloped countries. High economic growth creates opportunities for poverty eradication, employment creation, investment, and wealth creation. While measures to enhance cross-border trade are regarded as effective in enabling economic growth, studies have yielded mixed results on their impacts. Kenya's trade openness level has declined, besides the country implementing various policies to strengthen cross-border trade. Trade openness declined from 57 percent to 27 percent between 1990 and 2020, underscoring the need to understand its effects on Kenya's economy. The general objective of this research was to analyze the impact of trade openness on Kenya's economic growth, and the specific objectives were to determine the impact of trade openness on the economic growth of Kenya and to establish the effects of the quality of exported products on economic growth in Kenya. Ordinary least squares estimation technique was used to determine the relationship among variables. The study established that trade openness does not lead to increased economic growth in Kenya. The research further found that an increase in the quality of exports increases economic growth in Kenya. The study concluded that Kenya should enhance the quality of its exports and diversify them to improve economic growth. Further, the paper observed that Kenya should lower the cost of doing business in the country to make her industries and products competitive, which can help ensure trade openness positively impacts the country's economy. It was observed that attempts to restrict trade openness are likely to lead Kenya to experience similar measures from its trading partners
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    Trade Openness, Export Quality, and Economic Growth Nexus in Kenya
    (Kenyatta University, 2025-06) Gacheru, Washington Mbuthia
    Economic growth is crucial for reducing poverty, enhancing social opportunities, and building economic resilience. Trade liberalization is recognized as a primary catalyst for economic expansion, enabling domestic businesses to access global markets, secure foreign investment, adopt cutting-edge technologies, and boost productivity through international competition. Despite Kenya’s implementation of trade liberalization measures, its economic growth has remained slower than that of peer nations from the same period of independence, particularly East Asian countries. Various scholarly studies suggest that enabling economic growth requires a multidimensional approach, and trade liberalization alone is insufficient; export quality is a critical determinant of a nation’s competitiveness in the global market. High-quality exports can enhance economic stability by reducing exposure to external shocks, while low-quality exports face greater risks of imitation. Trade liberalization can also improve access to quality resources and facilitate technology transfer, potentially elevating production standards. This study aimed to assess the impact of trade openness on Kenya’s economic growth, considering the role of quality of the country’s export. The research incorporated a review of existing journals on trade openness, export quality, and economic growth, while also employing quantitative techniques to examine data spanning 1990 to 2020. Sources of data in the research project included the Kenya Government publications, The World Bank, and the United Nations. A correlational research design was employed to analyze relationships between economic growth and variables such as trade openness, export quality, and other control factors. The study was grounded in the Romer growth model. Prior to estimation, diagnostic tests confirmed the suitability of an autoregressive distributed lag model, which was later validated for reliability through post-estimation analyses. The findings indicate that in the short-run, trade openness has marginal negative impact on Kenya’s economic growth. However, the impact is not significant in the long-run. The findings suggest that trade openness results in adjustment costs that outweigh the benefits in the short-run. In the long-run, local firms overcome these initial challenges, which leads to neutral long-term effects of trade openness on Kenya’s economy. Meanwhile, enhancement of the quality of Kenya’s exports has a significant and positive effect on Kenya’s economy in the long-term, but the impacts are not significant in the short-term. The findings demonstrate that improving quality of exports is beneficial to Kenya’s economy although these gains materialize gradually. In this regard, Kenya should focus on progressively liberalizing the economy to mitigate against adjustment costs, while offering tailored assistance to struggling firms to protect them against adjustment costs. The government should also make its industries more resilient and able to exploit opportunities in international markets through investment in higher education, offering technical support, and enabling access to credit. Additionally, Kenya should implement a long-term export strategy that prioritizes value addition in key sectors like agriculture, textiles, and manufacturing, alongside enhancing product standards and certification to elevate global market credibility, since quality improvement of Kenya’s exports has a positive impact on the country’s economic growth. To achieve this goal, Kenya should focus on, infrastructure investments needed for enabling production of quality products, such as in energy, transportation, storage, and telecommunications. It should also focus on institutional development, such as police service, judiciary service, and tax authority like Kenya Revenue Authority, to ensure compliance standards on quality.