Browsing by Author "Guyo, Abuswaleh Abdi"

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    Macroeconomic Environment and Financial Performance of Small and Medium Enterprises in Nairobi City County, Kenya
    (Kenyatta University, 2025-12) Guyo, Abuswaleh Abdi
    Kenya's small and medium-sized businesses are vital to the country's growth and development economically. Nevertheless, the majority of Kenyan SMEs are not doing well financially; in the last five years, 2.2 million SMEs have closed, and 46.3% of SMEs have closed before their first year of operation has ended. Therefore, this research aims at investigating the effect of economic environment factors on the performance of Nairobi County’s small and medium enterprises in Kenya. Particularly, taxation, inflation, government laws and policies and government activity effect was assessed on Nairobi County small and medium enterprises performance. Open system theory, balanced scorecard theory, Gibbs theory, and institutional theory served as the study's foundations. Descriptive design was used. Targeted population constituted five hundred and thirty-two (532) of these businesses in Nairobi County, Kenya. A sample size of one hundred and fifty (150) firms was chosen utilizing stratified simple random sampling techniques, with the owners or managers acting as the participants in the survey. Information from primary and secondary sources was used. Structured, closed-ended surveys were the main tool used to gather data; a document review guide was utilized to get secondary information from these businesses' financial records between 2018 and 2023. The study instrument's validity and dependability was examined. To examine the data, both descriptive and inferential statistics was utilized. The researcher utilized a panel regression analysis. Autocorrelation, heteroscedasticity, multicollinearity and normality assessment were performed as tests for diagnostic. All ethical considerations were duly followed. Finding demonstrated that taxation possess an inverse and insignificant effect on the enterprises financial performance; inflation revealed a significantly positive effect on the enterprises financial performance; government laws and policy demonstrated also significant positive effect on the enterprises financial performance; Furthermore, government activity disclosed an insignificant but positive effect on the financial performance of these enterprises. The government should consider revising tax policies to create a more favorable environment for these enterprises. Specifically, the government should explore reducing tax rates and simplifying tax compliance processes to alleviate the financial burden on SMEs, enabling them to allocate more resources towards growth and innovation. Additionally, implementing targeted tax incentives and support programs could encourage formalization and compliance among SMEs, ultimately fostering a more robust business ecosystem that contributes to economic development and job creation in the region.