RP-Department of Economic Theory

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Field time constraints for farm planning models
(Elsevier Masson, 1998) Etyang, Martin N.; Preckel, P.V.; Binkley, J.K.; Doster, D.H.
Resource limits for weather dependent constraints in farm planning models are often implemented as chance constraints. Procedures for setting right-hand sides for these constraints are often based on rules of thumb which are seldom updated. This paper presents an approach for validating these rules of thumb, and demonstrates the approach for a heavily used farm planning model. An evaluation of the robustness of chance constraints for equipment availability which are dependent on good (sufficiently dry) field time, is presented. Rules for setting constraints affected by good field time were found to be dependent on the tillage system(s) under consideration. These results imply a need for more research on setting availabilities of stochastic resources under alternative tillage systems.
Customer relationship management practices as recipe for customer loyalty: A literature review
(2013) Kangu, Maureen; Wanjau, Kenneth; Kosimbei, George; Arasa, Robert
According to empirical evidence the extent of Customer Relationship Management (CRM) benefits to an organization will vary depending on the nature of the business concerned. They are likely to be more substantial in the case of any organization that has some or all of the following characteristics: frequent customer interactions and purchases, high cross-selling potential, perceived risks and involvement, and profitability. Findings from the empirical studies have grouped CRM benefits under two main paradigms: operational and strategic benefits. The review of literature provides insights into the operational and strategic benefits of CRM and how it can be used for strategic advantage of a business. It is advisable that organizations include in their strategic plans the CRM initiatives that they will use to ensure promotion of customer loyalty. It is one thing to plan for growth of business using data extrapolation and forecasting but it is equally important for organizations to plan for ensuring customers are managed professionally. Competition for business has been in the front of financial performance. Majority of global performance rankings of companies are based on financial performance. It is good if professionals and business experts can develop an index for CRM with very clear indicators and measurable processes. The index and its metrics can be used by firms to benchmark their CRM process and seek ways to improve in the areas which they have shortcomings. This will infuse a culture of customer relationship management, customer loyalty, CRM
Mobile teledensity and economic growth: A case of Sub-Saharan Africa (1988-2010)
(Global Research Society, 2014-12) Wainaina, Martin C.; Obere, Almadi; Wawire, N. H. W.
The need for an efficient, modern telecommunication sector is now regarded as crucial to economic growth in transition countries. Various studies have given conflicting findings on the relationship between economic growth and telecommunication. This calls for a thorough investigation on the role, relationship and, direction of causality between mobile telephone growth and economic growth. The objective was of the study was to determine the relationship between mobile teledensity and economic growth. To achieve the objectives, the study adopted the neoclassical growth model developed by Solow and Swan (1956).Using relevant diagnostic tests, Generalized Method of Moment (GMM) method of estimation was used on the panel data from 44 of Sub-Saharan Africa countries (1988 to 2010), the study found out a two-way causality for mobile teledensity and economic growth. The study proposes that the respective governments of sub-Saharan countries should implement policies that enhance the development of the telecommunications sectors in their respective countries.
The effects of financial repression on economic growth in Kenya.
(Asian Society of Business and Commerce Research, 2015) Gitau, Gabriel K.; Kosimbei, G. K.
Financial repression refers to the notion that a set of government regulations, laws, and other non-market restrictions prevent the financial intermediaries of an economy from functioning at their full capacity. The study sought to investigate the effect of financial repression on economic growth in Kenya. The target population of this study is the entire economy of Kenya. The Data was analyzed through the use E-views. The dependent variable under investigation was Economic Growth as measured by GDP while independent variables were elements of financial repression and included Interest rate ceilings, High bank reserve requirements, Broad Money (M3), Government Borrowing. The period covered under this study was 1996 to 2043 and utilized quarterly Secondary time series data. A descriptive research design was adopted. The study used an OLS regression equation and tested the values at 5% significance level and found evidence that Interest rate ceilings was negative and significantly related to economic growth (t-value -3.76), Broad Money was found to be negative and significantly related to economic growth (t-value -3.71 ). The study also found that government borrowing was negative and significantly related to economic growth (t-value -4.61), on the other hand High bank reserve requirements were found to be positive and insignificant related to economic growth.
The Nature of Foreign Direct Investment Spillovers Effects on Domestic Firms in Kenya
(International Journal of Development and Sustainability, 2015) Mugendi, Charles Ndegwa; Ndegwa, Charles; Nganga, Tabitha Kiriti; Muchai, Diana
During the recent years, it has been observed that countries compete with each other to attract foreign investment. This has been done owing to the notion that when foreign companies invest in a host country, productivity gains are assumed to accrue to domestic firms’ from spillovers generated by foreign affiliates. Empirical studies have shown that spillovers from foreign to domestic firms depend mainly on the country and host firms’ characteristics. Therefore, this study attempted to empirically examine the nature of FDI spillovers on domestic firms in Kenya. The study looked at the transmission mechanism, that is, both horizontal and vertical linkages. To achieve this objective primary data was collected from various firms in Kenya; this was from a sample of 204 firms from Nairobi, Nakuru, Mombasa and Kisumu cities. A panel of three years was taken, for the period 2010 to 2013. The data was captured using a structured questionnaire which was administered to various firms. A fact sheet was used to summarize the data collected before it was cleaned, coded and edited for completeness and accuracy. Thereafter analysis was done using descriptive statistics. The study found that foreign firms influenced domestic firm’s productivity through both vertical and horizontal spillovers in Kenya. Foreign firms were found to channel horizontal spillovers through competition effect, demonstration effect and labor turnover effects. On vertical spillovers small firms were found to benefit most from selling of goods and services to foreign firms.
Firm’s Characteristics and Productivity in Kenya
(American Research Institute for Policy Development, 2015) Mugendi, Charles Ndegwa; Gachanja, Paul Mwangi; Nganga, Tabitha Kiriti
There has been different theoretical argument on the link of different firm’s characteristics on productivity. According to various literature size of the firm, firm’s ownership characteristics, skilled labour force and expenditure on research and development are some of the firm’s characteristics that affect productivity. However different empirical studies conducted in both developing and developed countries have produced contradictory results. This study therefore examines how different firm’s productivity has affected various firms’ productivity in Kenya. To achieve this objective primary data was collected from various firms. Thereafter analysis was done using Feasible Generalized Least Square method (FGLS). According to the results foreign firms were more productive in most of the sectors in Kenya. Other factor that affected productivity included: research and development, gender diversity, skills and firms size. Ethnicity was found to have no impact on productivity.
Tax effort differentials between Kenya and Nigeria 2002 – 2012
(2015-04) Muthui, J. N.; Akims, K.; Mdoe, J. I.; Thuku, G. K.
Most developing countries are confronted with the need to provide/improve public infrastructure, education, health services and so on toward enhancing economic development. To meet these budgetary demands, these countries are increasingly focusing on domestic resource mobilization toward economic development. In this context,it has become especially crucial for developing countries in sub-Sahara Africa (SSA) to have a modest and efficient taxation system which can essentially supply sufficient internal resources thus, strengthening their domestic revenue bases. This has resulted in many developing countries undertaking various reform programs to improve tax policy and strengthen the taxing capacity of revenue administration. However, apart from the primary objective to meet public spending needs, other reasons for taxation may include; smoothening the cyclical volatility of economic growth; and (re) distributional aspects / improvement of equality. This paper used Tax effort to highlight the differentials in tax system between Kenya and Nigeria for the period 2002 – 2012. Tax effort is tax revenue, as a percentage of gross domestic products (GDP). That is, the tax to GDP ratio. Generally, this ratio is used to identify a country’s overall tax efforts. The tax effort gives a general indication of how a country is raising tax revenue relative to its given economic, structural potential and comparator countries. The discussion in this paper shows that tax structure, quality of revenue authority institutions and size of tax base directly influence tax effort whereas size of informal sector and trade openness are inversely related to tax effort. The discussion further shows that the share of mining has offsetting effects on tax effort. However for developing countries the urge to substitute taxes with resource revenue outweighs the dependence on taxation due political reasons and bargaining power of firms involved.
Labour Diversity and Domestic Firm’s Productivity in Kenya
(Center for Promoting Ideas, 2015-07) Mugendi, Charles Ndegwa; Ocharo, Kennedy Nyabuto
This study attempted to empirically examine the effect of labour diversity on firm’s productivity in Kenya. To achieve this objective primary data was collected from various firms. Thereafter analysis was done using Feasible Generalized Least Square method (FGLS). According to the study, firms that had more labour diversity in terms of skills and gender were more productive. But ethnic diversity had no impact on productivity. This is a crucial finding given the ongoing debate on the role of gender in development. Additionally, other variables like size of the firm and research & development expenditure had an influence on firms’ productivity
Public debt and economic growth in the East African Community.
(Global Research Society, 2015-08) Kosimbei, G. K.; Kwoba, Pauline L.
Public debt is among the main macroeconomic indicators that constitutes a country’s image in international markets and is an inward foreign direct investment flow determinant. A sound public debt management leads to economic growth and stability by mobilizing resources with low borrowing costs as well as limiting the financial risk exposure. The main objective of the study was to analyze the impact of public debt on economic growth in the East African community. Economic growth measured by GDP per capita growth was the dependent variable while gross fixed capital formation, labor force and public debt (both external and domestic) were explanatory variables. The study examined data for 24 years from 1990-2013 for EAC countries. Random effects model was adopted as per the results of the Hausman test. External debt was found to have a negative significant effect on economic growth while Gross fixed capital formation had a positive significant effect on economic growth. The study recommends that relevant policies that enhance gross capital formation and promote reduction of debt burden be adopted for sustainable growth in the EAC.
Firm’s Characteristics and Productivity in Kenya
(American Research Institute for Policy Development, 2015-09) Mugendi, Charles Ndegwa; Gachanja, Paul Mwangi; Nganga, Tabitha Kiriti
There has been different theoretical argument on the link of different firm’s characteristics on productivity. According to various literature size of the firm, firm’s ownership characteristics, skilled labour force and expenditure on research and development are some of the firm’s characteristics that affect productivity. However different empirical studies conducted in both developing and developed countries have produced contradictory results. This study therefore examines how different firm’s productivity has affected various firms’ productivity in Kenya. To achieve this objective primary data was collected from various firms. Thereafter analysis was done using Feasible Generalized Least Square method (FGLS). According to the results foreign firms were more productive in most of the sectors in Kenya. Other factor that affected productivity included: research and development, gender diversity, skills and firms size. Ethnicity was found to have no impact on productivity
Effects of regional integration on economic growth of East African community
(IJECM, 2015-11) Muriuki, Tina K.; Kosimbei, G. K.
This study looks into regional integration and how economic growth has affected it. Regional integration enables partner states to come together and form a group where they could promote economic and political cooperation among themselves. African countries have evolved from colonized and struggling nations to a new phase of independence. In this paper, the researcher examined the history of regional integration in East African Community, what motivated it, the different initiatives that EAC governments had pursued to improve regional integration, the nature of the integration process, and the current challenges. This paper examines empirically whether and how regional integration has affected economic growth amongst the EAC partner states. Panel data was carried out over the period of 1977-2014 for all the EAC partner states. In the findings, Terms of Trade and Foreign Direct Investments had a significant positive correlation with Gross Domestic Product growth, Exchange Rate had a significant negative correlation with Gross Domestic Product growth and Inflation Rate had insignificant negative correlation with Gross Domestic Product growth.
Agricultural Trade and Economic Growth in East African Community
(AJER, 2016) Ouma, D.; Kimani, T.; Manyasa, E.
East African Community states, as many other states in the region, depend largely on agricultural activities to boost their economic growth and create employment. Up to 80 per cent of the populace depends on agriculture directly and indirectly for food, employment and income, while about 40 million people in EAC suffer from hunger. The role of trade in economic growth and vice versa cannot be over emphasized. However, whether there is any link between EAC’s regional trade and the region’s economic growth remain unknown. This study therefore investigated the relationship of the agricultural trade with economic growth in East African Community. Several bi-variate Vector Auto-Regressive (VAR) and Vector Error Correction Models (VECM) were also estimated. Granger causality test and Impulse response analysis on trade and economic growth were performed using panel data from UNCOMTRADE, International Financial Statistics and World Development Indicators for the period 2000 – 2012 on the five EAC members and other 77 trade partners. Empirical findings showed mixed results for the different EAC member states. There existed bi-directional relationship between agricultural exports and economic growth in Kenya, uni-directional relationship in Rwanda, and no relationship at all in Burundi, Tanzania and Uganda.
Household Poverty Determinants in Kenya: A Demographic and Health Survey Wealth Index Approach
(Amen-Ra Theological Seminary, 2016) Gachanja, P.M.; Kinyanjui, G.K.
This paper shows that the Demographic and Health Survey Wealth Index need to be used with caution in the analysis of household poverty in Kenya. Thus, we depict a case of varied results when the wealth index is directly used with regional comparison, and discover that in both the binary and ordered logistic models, the years of education of household head, their marital status, the size of a given household and the region of residence (province) strongly determine household welfare status. We also observe that these characteristics are even more important in explaining household probability to poorest, and thus, lay emphasis on results obtained while controlling for household region of residence (province) to those that distinguish between rural and urban households
Constraints on Research Productivity in Kenyan Universities: Case Study of University of Nairobi, Kenya
(Multidisciplinary Journals, 2016) Muia, A.M.; Oringo, J.O.
Besides teaching, research has become a core function of universities around the world. Yet, like in many African countries, Kenyan universities still lag behind in terms of research productivity, due to factors many researchers refer to as constraints. This study which was conducted in the University of Nairobi sought to analyze constraints that influence research productivity in the university. Specific constraints that the study sought to analyze their impacts on research productivity included; resource constraints, institutional constraints, cultural constraints and other concepts and issues that impact on research productivity in the University of Nairobi. The study also sought to understand the respondents’ view on the overall status of research productivity in the University of Nairobi. Being the largest and the leading research university in the country, the researcher believed that the findings arising from the study of the University of Nairobi could appropriately be generalized to other universities in Kenya. The target populations of the study were the research personnel of the six colleges of the University of Nairobi. Data were collected by use of both open and closed ended questionnaires. The collected data were then analyzed and the findings presented by use of tables, graphs and charts. The study concluded that resource constraints, institutional constrains and cultural constraints have impact on the research productivity in the University of Nairobi. In the overall, the study established that research productivity in the University of Nairobi is at fair level. This view was overwhelmingly supported by the majority of respondents (62%). Other concepts and issues that were stated to have impact on research productivity included; lack of funds, poor management, lack of dissemination and implementation of research findings, inadequate materials and equipment, lack of incentives and rewards to researchers and sophisticated procurement procedures.
Determinant of Foreign Direct Investment Spillovers; Kenya’s Domestic Firms Case
(Center for Promoting Ideas, 2016-09) Mugendi, Charles Ndegwa; Njuru, Stephen Gitahi
Developing countries and emerging economies increasingly see foreign direct investment (FDI) as a catalyst to the development of domestic firms. This development can be through spillover effects whose presence can affect development of business enterprises in the host economy. FDI in developing countries is perceived not only as a source of capital inflow, but also as a vehicle for acquiring modern technology and the necessary managerial know how that these countries require for development. These are some of the reasons why most of the developing countries have continued to pursue domestic policies that encourage more FDI inflows. Many countries have gone further than simply removing barriers to inward foreign investment and have taken a more proactive approach towards attracting FDI through the use of fiscal and financial incentives. It appears therefore, that although the aggressiveness and effectiveness of the government’s policies in prompting FDI growth not been refuted, the effects of FDI on domestic firms and factors that determine spillovers are far from clear. Therefore, this study investigates the main firms’ characteristics that determine FDI spillovers. Firm level primary and secondary panel data were collected for the period 2012 to 2015. A structured questionnaire was administered to both domestic and foreign firms from different sectors. FGLS techniques was used and it was evident that firms that had skilled workers, high technology and research and development expenditure were able to attract horizontal and vertical spillovers.
Foreign Direct Investment Spill over’s on Domestic Firms: a Case of Kenya’s Domestic Firms
(American Research Institute for Policy Development, 2016-12) Mugendi, Charles Ndegwa; Njuru, Stephen Gitahi
Many developing countries, Kenya included have instituted many measures in order to attract more foreign direct investment (FDI). These measures sometimes have been at the expense of domestic firms. This is done with is a general belief that FDI has direct and indirect benefits to the economy. It is believed that foreign firms act as a catalyst in the development of local firms through positive spillovers effects. This may be through increased efficiency due to competition from foreign firms, imitation of technology, upgrading of local suppliers through technical assistance and transfer of knowledge from foreign to domestic firms. But drawing on the vast technical and managerial resource of its parent, a foreign firm may crowd out domestic investment. By borrowing locally it may also deprive domestic firms the main source of capital. In addition, foreign firms may take over domestic firm’s best employees by offering high wages and this reduces efficiency which eventually decreases the productivity of the domestic firms. Therefore the study empirically evaluates if domestic firms have benefitted from foreign firms in Kenya. Primary data was collected from three main cities Nairobi, Kisumu and Mombasa. Panel of three years between 2011 to 2014, was used and FGLS method of analyses was employed. It was evident that domestic firms benefited from foreign firms through both horizontal and vertical spillovers. Other variable that affected productivity also included, technological gap, research and development and level of skills
Demand for Reproductive Health Vouchers and Utilization: A Case Study of Output Based Approach in Kilifi Kenya
(NIHR Health Technology Assessment Programme, 2017) Mwangangi, Mary N.; Kioko, Urbanus; Korir, Julius
Demand side financing initiatives are different forms of financing health services that aim to minimize financial obstacles to accessing health care and also decrease inequities by ensuring that services are made affordable to poor and underserved populations through provision of subsidies. Vouchers have been expected to improve health outcomes by improving on service quality, improving effectiveness while also increasing the utilization of health care services. Despite the fact that vouchers have been implemented in Kenya since 2006, very few studies have focussed on underlying factors that contribute to low utilization even with high demand for the vouchers particularly in Kilifi County. This study investigates the relationship between demand and household and individual characteristics and also the relationship between utilization and household characteristics. The findings indicate that age, education, marital status and occupation had a relationship with demand for the reproductive health vouchers while for utilization of the vouchers only age and marital status were found to be statistically significant.
Technology Infrastructure: a Customer Relationship Management Dimension in Maintaining Customer Loyalty
(ijecm, 2017) Kangu, Maureen; Wanjau, Kenneth Lawrence; Kosimbei, George; Arasa, Robert
With intense competition among hotels, the study sought to assess the influence of technology infrastructure on customer loyalty as a strategy in Customer Relationship Management (CRM) in the hotel industry in Kenya. The study used the non-experimental cross-sectional survey design. A total of 147 hotels listed in the Kenya Association of Hotel Keepers and Caterers (KAHC) guide 2014 were studied. A census sampling technique was used. The respondents comprised of 147 customer relationship managers or equivalent. Semi structured questionnaires were used to collect primary data. Qualitative and quantitative techniques were used to analyze the data. The findings indicated that the hotel industry had effective technology infrastructure and that technology facilities were a key determinant of customer loyalty. The study concluded that technology infrastructure in the hotel sub sector in Kenya were key determinants to customer loyalty. The study recommends that the hotel management ensures that the hotels are upgraded with the technological changes taking place in the whole world; the management conducts a market survey of the technological facilities in use in other hotels so as to minimize high competition from the competition.
Role of Customer Orientation on Customer Loyalty in the Hotel Industry in Kenya
(ijbm, 2017) Kangu, Maureen; Wanjau, Kenneth Lawrence; Kosimbei, George; Arasa, Robert
The purpose of the study was to establish the role of customer orientation on customer loyalty in the hotel industry in Kenya. The study used the non-experimental cross-sectional survey design. A total of 147 hotels listed in the Kenya Association of Hotel Keepers and Caterers (KAHC) guide 2014 were studied. A census sampling technique was used. The respondents comprised of 147 customer relationship managers or equivalent. Semi structured questionnaires were used to collect primary data. Qualitative and quantitative techniques were used to analyze the data. Qualitative and quantitative techniques were used to analyse the data. Quantitative techniques were used to analyze the data. The study findings showed that customer orientation has contributed to customer loyalty in the hotel industry in Kenya. The study concludes that employees were easily accessible, empowered to take initiative and their knowledge of hotel procedures was recommendable. Stakeholders in the hospitality industry should be aware that a loyal customer does not only engage in repeat patronage but also provides positive word-of-mouth to other people, thereby increasing the revenue of the hotel. The implication of this, therefore, is that a customer’s change of patronage would have an impact in the long-term revenue of the hotel. Delivering quality service to customers is a must for success and survival in today’s competitive hospitality industry
Determinants of Sustainable Development in Kenya
(IISTE, 2017) Kaimuri, Belinda; Kosimbei, George
This study investigated the determinants of sustainable development in Kenya using annual data for Kenya for the period of 1991 to 2014. Adjusted net savings rate (ANSR) was used as a proxy sustainable development. The study used the autoregressive distributed lag model (ARDL) for the analysis and the bounds test for cointegration to test whether a long run relationship exists between the study variables - household consumption per capita, unemployment rate, resource productivity, energy efficiency, real gross domestic product per capita and terms of trade. The main result from the study was that a long run relationship exists between the variables. Secondly, the estimated coefficients of household consumption per capita negatively impacts sustainable development in the long run while unemployment rate and energy efficiency both negatively influence sustainable development in the short run. Resource productivity, real gross domestic product per capita and terms of trade are insignificant in determining sustainable development. The results suggest that developing the economy while stimulating savings and promoting a contractionary fiscal policy on public deficits will promote sustainable development.

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