PHD-School of Economics

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This collections contains bibliographic information and abstracts of PHD theses and dissertation in the School of Economics held in Kenyatta University Library

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Adoption of adapted technology by micro and small enterprises in the informal sector in Kenya
(Kenyatta University, 2015-10) Kuuya, Patrick Masette
The government of Kenya, assisted by donor agencies, has since the 1980s, sought to enhance workers‘ productivity in the informal sector. To achieve this objective, the strategy adopted was to replace the use of archaic indigenous and inappropriate imported technologies with locally designed and produced adapted technology. Although since its inception in 1979,KIRDI has been adapting imported technology for use by entrepreneurs in the informal sector, the rate of adoption has been low. The main objective of this study was to investigate factors that influence adoption of adapted technology in Kenya‘s informal sector. The study adopted a logistic model, which, with the help of descriptive statistics, was used to analyse data collected from 320 respondents from six districts, two each from the Nairobi, Kisumu and Nyeri counties. The study‘s descriptive statistics showed that perceived usefulness of the technology, perceived ease of use of the technology, perceived reliability of the technology to the adopter, and the perceived suitability of the technology to the Jua Kali environment factors were important influences on the decision to adopt adapted technology. The results also showed that the overwhelming majority of adopters of adapted technology got information about the adapted technology through the interpersonal contact communication channel. The regression on the 13 predictor variables was done to get marginal effects. The regression results showed that six out of seven technology-specific variables in the logit model were important in explaining the decision to adopt adapted technology. These were: cost of machine; machine‘s maintenance cost; number of workers needed to operate the machine; wage bill of the workers operating the machine; cost of energy; and perceived conferment of higher social status (in the local community) to the owner. The regression results also showed that three out of five human factor variables, individually, made a significant difference in the decision to adopt adapted technology. These were: age of adopter; level of education; and marital status of the adopter. These regression results implied that government institutions and donor agencies involved in designing and producing adapted technology should ensure that the adapted products were cheaper and easier-to-use than their non-adapted imported substitutes; required low servicing and maintenance cost; and should not be labour intensive, but be perceived to be attractive to the adopters who wished to be self employed. The results also showed that high wages of workers were a disincentive to adoption. This implied that the government should avoid extending the mandatory minimum wage requirement to entrepreneurs in the informal sector. In addition, the results implied that the government and donor agencies should target the youth and women groups when promoting adoption of adapted technology; and that special emphasis on standardized quality products during skills training in vocational and other tertiary institutions should be prioritized. Finally, for information access, the policy implication was that government should resurrect the programme of building infrastructural facilities, such as construction of industrial sheds to be rented by jua kali artisans, as per government policy enunciated in Sessional Paper No. 2 of 1992. These sheds could double as information dissemination centres for potential adopters.
Agricultural Credit Accessibility and its Effects on Output of Smallholder Farmers in Plateau State, Nigeria
(Kenyatta University, 2023-11) Baba, Sunday; Nelson H.W. Wawire; Charles Mugendi
Agricultural credit improves smallholder farmers‘ purchasing power by allowing them to use modern technologies for their farm production. Credit is therefore imperative for agriculture which had previously been a non-commercial venture for the rural inhabitants. Studies have shown that unless credit is made available on suitable terms, majority of the smallholder farmers cannot acquire modern technology for production. Farmers are therefore faced with the challenges of low productivity, inadequate access to logistic support, input, crop infestations by pests and diseases and loss of crops and livestock. The overall objective of the study was to investigate agricultural credit accessibility and its effects on output of smallholder farmers in Plateau State, Nigeria. The specific objectives of the study were to: find out the determinants of access to agricultural credit by smallholder farmers; to investigate how credit accesses by smallholder farmers affect the agricultural output and to investigate the credit utilisation behaviour of smallholder farmers on agricultural output The target population for the study was the smallholder farmers that were engaged in agricultural practices in Plateau State, Nigeria. The sample size was 399 households that par-took in agricultural practices in sampled State. The study used structured questionnaires to collect primary data. The collection of primary data was done through the administration of questionnaires to selected smallholder farmers. From the data collection process, the researcher was assisted by research assistants that made frequent follow-up on the respondents to ensure that high response rate was achieved. In objective one, the study used probit model because the dependent variable is credit access. The dependent variable was measured using binary scale and therefore the study tried to find the likelihood of the variable, while the independent variables influencing access to credit. The study adopted treatment effect model using the method of Propensity Score Matching. Access to credit was considered in this case a treatment hence the study tried to establish veracity of access to credit on agricultural output of smallholder farmers. Utilisation behaviour was also considered in this case a treatment hence the study tried to establish the veracity of credit utilisation behaviour on agricultural output of smallholder farmer. The first specific objective was to analyse the determinants of agricultural credit access by smallholder farmers. The study found that the level of education; farm size; source of income; household size; credit information; distance to the scheme; distance to the cooperative society and the type of agricultural activity served as determinants of credit access to smallholder farmers. The second objective was to determine the effect of access to agricultural credit on agricultural output by smallholder farmers. The study found that average treatment effect on the treated (ATET) coefficient was positive and significant, meaning that the output small holders farmers realized is not much. The third objective was to investigate the effect of credit utilisation behaviour of smallholder farmers on agricultural output. The study found that the coefficient for ATET was negative and significant because the output that smallholder farmers get at the end of each farming season is insignificant. The study recommended that there is the need for government to come up with more efficient credit facilities to enable smallholder farmers to access credit easily.
Agricultural export supply response to price and non-price Variables: a case of horticultural sub-sector in Kenya
(Kenyatta University, 2015) Njenga, Peter Miring'u
ABSTRACT Kenya has a long history of growing horticultural crops for both domestic and export markets. The climatic conditions are highly varied supporting the growth of a wide range of horticultural crops. The horticultural sector currently ranks as one of the economy's fastest growing sectors and is ranked as the second leading foreign exchange earner after tea. The sub-sector is a major source of livelihood to smallholder farmers and has been identified as a key 'driver' towards the realization of "Vision 2030" which envisages Kenya as a middle income economy and a semiindustrialized country by the year 2030. Although horticultural exports have been contributing to increased rural incomes and reduction of rural poverty in Kenya, horticultural exports remain a small fraction of Kenya's overall export sector. This produce is far from saturating world demand. The understanding of the responsiveness of horticultural export supply to changes in price and non-price factors is crucial for formulating a sound horticultural export specific policy package. The key issue is how urgently Kenya should increase horticultural exports supply and make such an increment sustainable. This study investigated the effect of price and non-price variables on horticultural export supply in Kenya and also drew policy implications from the findings. Time series secondary data for the period between 1973 and 2010 was used. The study used the autoregressive distributed lag (ARDL) estimation procedure which tested for the existence of a non-spurious long-run relationship between price and non-price factors and horticultural export supply response. Diagnostic tests were also carried out. The Error Correction Term lagged once was negative and statistically significant indicating high speed of adjustment. In the long-run, the empirical findings show that horticultural export supply responds positively to agricultural credit, classified road network, foreign direct investment, trade openness and EurepGap. The horticultural exports had elastic response on all factors apart from that of foreign direct investment which was inelastic, otherwise all were statistically significant. Coefficients for relative producer price and income per capita were statistically significant and had negative effect on horticultural export supply. This study recommends that more data and information on prices and market connections should be made available so as to make horticultural export suppliers to be well informed on any price fluctuation. There should be construction and maintenance of rural access roads. Embassies abroad and private companies should carry out promotions through trade fairs and exhibitions so as to maintain and improve on this low horticultural export supply response with respect to relative producer price. The study further recommends provision of appropriate credit packages for horticultural producers and dissemination of information on available sources of funding. Work permits should be provided to genuine foreign investors who are interested in horticultural export business. Government should also enhance the capacity of public research institutions. Monitoring and evaluation of trade flows should be encouraged. Where feasible, private sector players should be facilitated to undertake self-regulation and conform to international market requirements.
Agricultural Trade and Economic Growth in East African Community, 2000 - 2012
(Kenyatta University, 2015) Ouma, Duncan O.
Agricultural activities contribute about 33% of the East African Community‟s Gross Domestic Product (World Bank, 2009), 80 per cent of the populace depend on agriculture directly and indirectly for food, employment and income, while about 40 million people in EAC suffer from hunger. Intra-EAC trade is very low, that is, at 9 per cent of the total regional trade, but it is on upward trend. Agricultural trade accounts for over 40 per cent of the intra-EAC trade. This study investigated the causes of intra-EAC agricultural trade, effect of EAC regional trade agreement on the regions agricultural trade by analyzing the degree of trade creation and diversion effects, and examined relationship of the regional agricultural trade with the region‟s economic growth. Several Augmented gravity models were estimated using the Pseudo Poisson Maximum Likelihood (PPML) Approach. Several bi-variate Vector Auto-Regressive (VAR) and Vector Error Correction (VEC) models 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. The empirical findings showed mixed results for the different EAC member states. The intra-EAC agricultural exports depended on various factors, including GDP of exporter, GDP of the importer, Exchange rate, distance between the economic centres, language similarities, adjacency and population of the exporter. EAC regionalism had no significant effect on agricultural exports of Burundi, Rwanda and Uganda, while Kenya and Tanzania had reported significant effect of regionalism on their agricultural exports. Furthermore, the study findings showed that 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. EAC secretariat in collaboration with governments of EAC member states should enhance integration among the member states, as membership to EAC had significant effect on trade volumes for Kenya and Tanzania. EAC secretariat and respective governments in EAC should also reduce currency value disparities among the member states as a means of promoting intra-regional agricultural trade. The proposed monetary union and harmonization of currencies would significantly promote agricultural trade within the region. The EAC member states should also enhance border liberalization, as this will also promote intra-regional agricultural trade. Finally, to achieve and sustain high economic growth, Kenya and Rwanda governments should promote agricultural exports to both the EAC region and beyond, this is because empirical results show that a shock in agricultural exports for the two countries have a long run positive effects on their economic growth. This study concluded that EAC regional trade agreement has a potential of promoting EAC regional agricultural trade. Intra-EAC agricultural trade can still be improved and that the regional trade promotes economic growth in Kenya and Rwanda.
Agricultural trade and economic growth in East African Community, 2000 - 2012
(Kenyatta University, 2015-03) Ouma, Duncan O.
Agricultural activities contribute about 33% of the East African Community‟s Gross Domestic Product (World Bank, 2009), 80 per cent of the populace depend on agriculture directly and indirectly for food, employment and income, while about 40 million people in EAC suffer from hunger. Intra-EAC trade is very low, that is, at 9 per cent of the total regional trade, but it is on upward trend. Agricultural trade accounts for over 40 per cent of the intra-EAC trade. This study investigated the causes of intra-EAC agricultural trade, effect of EAC regional trade agreement on the regions agricultural trade by analyzing the degree of trade creation and diversion effects, and examined relationship of the regional agricultural trade with the region‟s economic growth. Several Augmented gravity models were estimated using the Pseudo Poisson Maximum Likelihood (PPML) Approach. Several bi-variate Vector Auto-Regressive (VAR) and Vector Error Correction (VEC) models 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. The empirical findings showed mixed results for the different EAC member states. The intra-EAC agricultural exports depended on various factors, including GDP of exporter, GDP of the importer, Exchange rate, distance between the economic centres, language similarities, adjacency and population of the exporter. EAC regionalism had no significant effect on agricultural exports of Burundi, Rwanda and Uganda, while Kenya and Tanzania had reported significant effect of regionalism on their agricultural exports. Furthermore, the study findings showed that 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. EAC secretariat in collaboration with governments of EAC member states should enhance integration among the member states, as membership to EAC had significant effect on trade volumes for Kenya and Tanzania. EAC secretariat and respective governments in EAC should also reduce currency value disparities among the member states as a means of promoting intra-regional agricultural trade. The proposed monetary union and harmonization of currencies would significantly promote agricultural trade within the region. The EAC member states should also enhance border liberalization, as this will also promote intra-regional agricultural trade. Finally, to achieve and sustain high economic growth, Kenya and Rwanda governments should promote agricultural exports to both the EAC region and beyond, this is because empirical results show that a shock in agricultural exports for the two countries have a long run positive effects on their economic growth. This study concluded that EAC regional trade agreement has a potential of promoting EAC regional agricultural trade. Intra-EAC agricultural trade can still be improved and that the regional trade promotes economic growth in Kenya and Rwanda.
Agricultural trade and economic growth in East African Community, 2000 - 2012
(Kenyatta University, 2015-03) Ouma, Duncan O.
Agricultural activities contribute about 33% of the East African Community‟s Gross Domestic Product (World Bank, 2009), 80 per cent of the populace depend on agriculture directly and indirectly for food, employment and income, while about 40 million people in EAC suffer from hunger. Intra-EAC trade is very low, that is, at 9 per cent of the total regional trade, but it is on upward trend. Agricultural trade accounts for over 40 per cent of the intra-EAC trade. This study investigated the causes of intra-EAC agricultural trade, effect of EAC regional trade agreement on the regions agricultural trade by analyzing the degree of trade creation and diversion effects, and examined relationship of the regional agricultural trade with the region‟s economic growth. Several Augmented gravity models were estimated using the Pseudo Poisson Maximum Likelihood (PPML) Approach. Several bi-variate Vector Auto-Regressive (VAR) and Vector Error Correction (VEC) models 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. The empirical findings showed mixed results for the different EAC member states. The intra-EAC agricultural exports depended on various factors, including GDP of exporter, GDP of the importer, Exchange rate, distance between the economic centres, language similarities, adjacency and population of the exporter. EAC regionalism had no significant effect on agricultural exports of Burundi, Rwanda and Uganda, while Kenya and Tanzania had reported significant effect of regionalism on their agricultural exports. Furthermore, the study findings showed that 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. EAC secretariat in collaboration with governments of EAC member states should enhance integration among the member states, as membership to EAC had significant effect on trade volumes for Kenya and Tanzania. EAC secretariat and respective governments in EAC should also reduce currency value disparities among the member states as a means of promoting intra-regional agricultural trade. The proposed monetary union and harmonization of currencies would significantly promote agricultural trade within the region. The EAC member states should also enhance border liberalization, as this will also promote intra-regional agricultural trade. Finally, to achieve and sustain high economic growth, Kenya and Rwanda governments should promote agricultural exports to both the EAC region and beyond, this is because empirical results show that a shock in agricultural exports for the two countries have a long run positive effects on their economic growth. This study concluded that EAC regional trade agreement has a potential of promoting EAC regional agricultural trade. Intra-EAC agricultural trade can still be improved and that the regional trade promotes economic growth in Kenya and Rwanda.
Analysis of Fertility and its effects on Health among Mothers and Children in Tanzania.
(2016-11) Lihawa, Robert Michael
ABSTRACT Health is an important socioeconomic component as it promotes the national welfare and fosters economic prosperity. Tanzania has made significant strides with regards to investments in its health sector by developing major health policies meant to enhance sustainability of the health status of its populace. , Significant efforts have been directed towards reduction of disability, morbidity and mortality, further nutritional status and improving life expectancy. However, despite the government's effort to improve access to health services across Tanzania, poor maternal and child nutritional health statuses are still a challenge to date. On the other hand, fertility rate in Tanzania is higher than the global average that poses serious challenges for sustainable development. The core objective of this study was to examine the relationship between fertility, maternal health and child health outcomes in Tanzania. Specifically, the study examined the effects of socioeconomic factors on fertility in Tanzania. Subsequently, the study sought to examine the effect of fertility on child health outcomes using height-for-age Z-score (HAZ) and the probability of a child being stunted as dependent variables. The study also examined the effect of fertility on maternal health status using Body Mass Index (BMI) and the probability of a mother being underweight as dependent variables. Cross-sectional data from Tanzania Demographic Health Surveys for 2010 was used for the analysis. The study used Zero Inflated Poisson regression model to estimate the effect of socioeconomic factors on fertility. Subsequently, Ordinary Least Square (OLS), Probit, Instrumental Variable IVProbit and IVregression models and the Control Function Approach (CFA) were employed for the analysis of the effect of fertility on maternal and child health outcomes while controlling for the endogeneity and heterogeneity problems. Based on the study's findings, the age of the mother and marital status significantly affect the number of children in Tanzania. On the other hand, maternal education, mother's employment, contraceptive use, awareness of family planning, access to media and place of residence were associated with significant changes in fertility. Again, fertility significantly lowered the height-for-age z-score (HAZ) and increased the probability of a child being stunted. On the maternal health status, high fertility reduces the women's welfare by reducing the Body Mass Index (BMI) and consequently increasing the probability of a mother being underweight. Results further indicate a presence of heterogeneity arising in the maternal health model. Based on the finding of this study, promotion of family planning is recommended. The study also recommends investing in women's education as a way of rooting out illiteracy on matters related to family planning. There is also a need for the government to increase the proportion of women in the labor force and boost their participation in the same as a means of enhancing their well-being as well as that of their families.
Analysis of Systemic Risk Among Asset Prices Movement, Financial System and the Real Sector Economy in Kenya
(Kenyatta University, 2019-06) Makambi, Steve Anyona
The global economy enjoyed a period of low inflation and growth during the great moderation period in mid-1980 to 2006. However, prevalence of financial crises during and immediately after the great moderation period led to the realization that asset price movement was central to financial system stability. Second, it was discovered that pursuance of monetary policy does not guarantee financial stability. In this regard, there was great uncertainty as to the policy instrument needed to safeguard financial health in the economy. Safeguarding financial stability encompasses analysis of systemic risk factors that causes turmoil in the financial and real economic sectors. Systemic risks consist of all potential risk in the economic system that may negatively affect proper functioning of the economic system. In this regard, this study sought to analyze systemic risk among asset prices movement, financial system and the real economy. Specific objectives include: (i) to analyze the systemic risk in security asset prices movement in Kenya; (ii) to analyze the systemic risk in housing asset prices movement in Kenya; and (iii) to investigate the relationship among financial risk, asset prices movement and real sector economic variables in Kenya. To address the first and second objectives, three variants of consumption-based capital asset pricing model (CCAPM) are used. These include the standard CCAPM model, habit formation CCAPM model and Two-goods CCAPM model. To address the third objective, a macro-financial model was specified and included asset prices movement, credit risk and real economy variables. Quarterly time series data from 2001Q1 to 2017Q3 was used for analysis. The macro-financial model was estimated using VAR-X model. The main findings show that consumption risk factors such as changes consumption growth, habit formation and growth of durable goods were important in determination of security and housing asset prices movement. It was further established that while Kenyan investors make asset pricing decision with the objective of smoothening lifetime consumption, they exhibit low risk aversion behavior, and this was more pronounced in the housing market. However, there was evidence to show that risk aversion increases during bad economic times. Analysis of the relationship among financial risk, asset prices movement and the real sector confirmed existence of feedback loop between the asset market and real sector of the economy on one hand; and feedback effect between real sector variables and financial risk in the Kenyan economy on the other. It was further established that financial risk is was countercyclical to business cycles and tend to increase during recession and reduce during boom periods. Based on these findings, the study concluded that while low risk aversion maybe an indication of low systemic risk in the Kenyan market evidence of adjustment of risk during recession emphasizes the need for constant monitoring of systemic risk in the asset market. In addition, existence of feedback loops among macro-financial variables and enhances the need to adopt systemic risk management policies. The main study recommendation include designation of a macroprudential authority within Central bank with clear structures and mandate to constantly monitor systemic risk in the economy.
Analysis of Tax Revenue Productivity for Selected Countries in the East African Community
(Kenyatta University, 2020) Manyanza, Rhodah Mueni
The East African Community member states face challenges in mobilizing tax revenues to the required level which is suitable for economic growth enhancement and attaining fiscal sustainability. Tax reforms have been implemented in the region with the main objective of mobilizing more tax revenues. However, the tax revenue collections have been inadequate leading to persistent budget deficits which shows the inability of the tax system to generate sufficient revenues to finance public expenditure. Moreover, the member states have not been able to attain the target of Sub Saharan Africa average tax to gross domestic product of 26 per cent. Therefore, this study sought to establish the determinants of tax revenue, analyse the trends of tax effort indices and examine the effect of integration on productivity of tax revenue, for selected taxes for countries in the East African Community. The study employed non-experimental research design using time series data for the period 1984 to 2016. Appropriate tests for time series data were carried out whereby unit root test was done to determine the stationarity of the data and variance inflation factor to test for multicollinearity. Various diagnostics tests were conducted to determine the suitability of each econometric model. Regression analysis was carried out using ordinary least square. The study findings showed that the political risk factors, which included bureaucracy quality, democratic accountability and internal conflict, were key determinants of tax revenue. Gross domestic product per capita and inflation were determinants of tax revenue in all the countries; trade openness and manufacturing share in gross domestic product were key determinants of tax revenue in Kenya and Tanzania; while dependency ratio was a determinant of tax revenue in Kenya only. The efficiency of institutions was a key determinant of tax revenues in Kenya. Analysis of tax effort trends the study findings showed that, tax reforms, economic reforms and stabilization programmes, increase in agricultural output, political stability and reconstruction programmes increase tax effort. On the other hand, drought, financial crises, tax reductions and exemptions, low agricultural output, political instability and foreign aid embargo and high petroleum prices decrease tax effort. The study results showed that, formation of East African Community led to direct increase of all selected taxes in Kenya, while in Uganda it led to increase in total tax revenue, excise tax and direct tax. In terms of productivity, integration increased productivity of total tax revenue, value added tax and direct tax in Kenya, while in Uganda it led to increase in productivity of excise tax and direct tax. Integration also led to decline in productivity of total tax revenue in Tanzania, excise taxes and import taxes in Uganda and excise taxes in Kenya. The study recommends that East African Community governments should strengthen quality and efficiency of institutions through employment of qualified personnel, retraining and review of existing policies. Measures need to be put in place to control acts of civil war, civil disorder and terrorism. The East African Community governments should embrace policies that broaden tax base, improve tax administration, increase economic activities and stabilization policies to increase tax effort. Moreover, the thriving of East African Community need to be encouraged through policies such as labour mobility, improved infrastructure and simplification of regulatory framework coupled with research and development. Measures need to be put in place to control smuggled goods across borders and reduce tax fraud in custom authorities.
Bank efficiency, mergers and acquisitions and shareholder effects in Kenya
(2013-01-22) Muniu, J. M.; Obere, Almadi; Mburu, Tom Kimani; Odour, Jacob
Mergers and Acquisitions have become a prominent feature in Kenya's banking industry. The Central Bank of Kenya and shareholders of banking institutions in Kenya have a positive inclination to mergers and acquisitions. However, Kenya has witnessed a mix of dismal performance by some merged banking institutions and very positive performance by others. This has left stakeholders in the banking industry wondering whether mergers and acquisitions should be encouraged in the industry. This study therefore aimed at analyzing the value effects of mergers and acquisitions in Kenya's banking industry in a bid to offer a solution to this pertinent issue. The study investigated performance, efficiency and shareholders' wealth effects of banking institutions' mergers and acquisitions in Kenya between the years 1989 and 2010. Two major approaches were used in the study to determine the value effects of banking institutions mergers and acquisitions. These entailed modelling performance and efficiency effects to capture benefits streaming to the institutions and analyzing stock returns to determine shareholders' value effects. The study also determined the bank specific determinants of successful banking institution mergers and acquisitions. The study found that although mergers and acquisitions led to improved profit efficiency, large banks benefited more from improved performance than the small banks. Primary shareholders of banking institutions that engaged in mergers and acquisitions benefited from improved profit performance and stability in their wealth holding, while secondary shareholders did not experience capital gains. The study also found that the larger the merged banking institution, the higher was the probability of its success as a merger. Finaily, higher expenditure levels also contributed positively to the probability of success of mergers and acquisitions. It is therefore the recommendation of this study that incentives for value enhancing mergers be offered. The government should also encourage more investment in the banking industry specifically targeting the small banking tier. Finally, merged banking institutions should spend more on advertisement, labor and modern technology to increase their probability of success
Benefit incidence analysis of constituencies development fund spending on education bursaries in Makueni County, Kenya
(2015) Makali, B. Mulu
The Constituencies Development Fund is one of the decentralized efforts started by Government of Kenya to tackle poverty and regional imbalances in Kenya since 2003. It has allocated over 40 per cent of the resources annually to education sector including bursaries. However, doubts have been cast over time as to whether the Fund’s expenditure is effectively targeted towards meeting the needs of the poor as anticipated especially in the education bursaries that take substantial resources. This study examined the distribution of the Fund’s education bursaries; ascertained the extent to which the Fund’s spending on education bursaries was progressive, regressive or neutral; and examined the gender dimension in the benefit incidence of CDF spending on education bursaries. The study used primary data for two variables: actual CDF expenditure on education bursaries at different levels and expenditure data for households from which the users of the CDF bursaries belonged. Secondary data was collected for users (by sex) of educational bursaries provided through CDF funding. The Benefit Incidence Analysis was used as the estimation technique to arrive at empirical findings. The study established that distribution of CDF education bursaries depended a lot on the nature of engagement of the head of the household and there was an inverse relationship between level of education attained by household head and the amount of CDF bursary awarded. The study also found that there was inconsistency in average bursary awards to different quintiles demonstrating poor targeting of such bursaries making access to education difficult and costly to poorer Kenyans. Results of the study established that CDF’s spending on education bursaries was progressive for secondary education and regressive for the tertiary level of education where students from the rich households gained undue advantage over the students from poor households. On gender dimensions, the study established that CDF expenditure on education bursaries was biased towards male students. In light of the foregoing, the study recommends that the government through the CDF boards improve dissemination of information on CDF bursaries by providing adequate publicity / communication budgets to enhance inclusiveness in bursary applications; government opens as many opportunities as possible for young Kenyans to achieve higher levels of education; the government should subsidise tertiary education to guarantee access to tertiary education by the poor; and the government could as a matter of urgency address poor targeting of CDF bursaries through effective profiling of needy students. The government through the ministry of education could increase budgetary allocations for secondary school bursaries by better prioritisation and ring fencing resources. On gender dimensions, it is important that the government has the right policy framework to ensure equal opportunities are availed. In conclusion, there should be better targeting and harmonisation of all educational bursaries focusing more on efficiency, equity and effective participation
Budget deficits and macroeconomic performance in Kenya (1963- 2007): An empirical analysis.
(Kenyatta University, 2009-09) Kosimbei, George Kipng'etich
Budget deficits have attracted a great deal of attention over the past two decades. They have been blamed for the assortment of ills that beset developing countries. The objectives of this study included: describing the budgeting process, explaining the sources of budget deficits, investigating the various methods used by the government of Kenya to finance budget deficits, analyzing the effects of budget deficits on selected macroeconomic variables and finally establishing the types of relationships that exists between budget deficits and selected macro variables. This study was underpinned on the Mundel- Fleming model. It applies Vector Auto regressions (VARs) together with annual time series data for the period 1963 to 2007 to evaluate the empirical effects of budget deficits on macroeconomic performance. The data used were selected macroeconomic variables that included; current account of the balance of payments, private consumption, private investment, money supply, Treasury bill rates, and real GDP. The study established that the budgeting process had loop holes which perpetrated budget deficits. Also, the sources of budget deficits include: level of economic development, low growth of revenue, instability of government revenues, government control over expenditures and the extent of government participation in the economy. The impulse response functions (IRFs) revealed that budget deficits have a significant effect on: private consumption, private investment, money supply (M3), treasury bills rate, current account and real GDP. These effects usually lasted for more than five years. Johansen co integration tests revealed a long run relationship between budget deficits and the selected macroeconomic variables. The overall ecommendation of this study is that the government of Kenya should formulate a firmer fiscal policy that would minimize budget deficits because they affect economic performance in Kenya.
Budget deficits and macroeconomic performance in Kenya (1963-2007): an empirical analysis
(2011-07-21) Kosimbei, G. K.
Budget deficits have attracted a great deal of attention over the past two decades. They have been blamed for the assortment of ills that beset developing countries. The objectives of this study included: describing the budgeting process, explaining the sources of budget deficits, investigating the various methods used by the government of Kenya to finance budget deficits, analyzing the effects of budget deficits on selected macroeconomic variables and finally establishing the types of relationships that exists between budget deficits and selected macro variables. This study was underpinned on the Mundel- Fleming model. It applies Vector Autoregressions (VARs) together with annual time series data for the period 1963 to 2007 to evaluate the empirical effects of budget deficits on macroeconomic performance. The data used were selected macroeconomic variables that included; current account of the balance of payments, private, consumption, private investment, money supply, treasury bill rates, and real GDP. The study established that the budgeting process had loop holes which perpetrated budget deficits. Also, the sources of budget deficits include: level of economic development, low growth of revenues, instability of government revenues, government control over expenditures and the extent of government participation in the economy. The impulse response functions (IRF ) revealed that budget deficits have a significant effect on: private consumption, private investment, money supply (M3), treasury bills rate, current account and real GDP. These effects usually lasted for more than five years. Johansen cointegration tests revealed a long run relationship between budget deficits and the selected macroeconomic variables. The overall recommendation o f this study is that the government of Kenya should formulate a firmer fiscal policy that would minimize budget deficits because they affect economic performance in Kenya.
Competition and profitability of commercial banks in Kenya
(2017-05) Mdoe, Idi Jackson
The banking sector in Kenya is characterized by intermediation inefficiency in the form of interest driven exceptional bank profitability.Competition among commercial banks should remedy this situation by driving bank profitability to the competitive norm. This study examined how competition is correcting this inefficiency byinvestigating competition and profitability of commercial banks in Kenya.Specifically, the study ascertained the level of competition among commercial banks; determined the speed of adjustment of commercial banks profitability to the competitive norm; and investigated the effect of changes in the competitive landscape on commercial banks profitability. The study used a balanced panel data set for 36 commercial banks covering the period 2001 to 2014.The study used the performance dynamics approach and the generalized method of moments to estimate the resulting dynamic panel models. The investigation established thatthe level of competition among commercial banks in Kenya was low and characterized by 96.1 per cent persistence in profitability. The speed of adjustment of commercial banks profitability to the competitive norm was 3.9 per cent per year with a half-life of 17.42 years. The study also found that in the short run,increase in level of technology reduces exceptional bank profitability by 0.852 per cent. The study further found thatconsolidation has a negative effect on exceptional bank profitability in the short run and a positive effect in the long run. Finally, the study established that the progressive increase in core capital requirement for commercial banks in 2008 enhanced persistence of exceptional bank profitability and reduced bank competition. Arising from the study findings, it is important that the government intervenes to rectify the intermediation inefficiency occasioned by ineffectiveness of competition and the slow speed of adjustment towards the competitive norm. It is also important that small sized banks in the sector voluntarily merge with other smaller banks in order to exert substantial competition to the large and medium sized banks. For effectiveness, the findings imply that intervention by government should target swift adoption of technology by all commercial banks and trigger consolidation among the target tiers of commercial banks up to the optimal level. In addition, the findings imply that banks with exceptionally low levels of profitability should seek other forms of recovery. The options here include exiting the market, or mergers and acquisitions. This is because as established in the study, market forces may not help such commercial banks to return to sustainable profitability in the short run.
Cultural and social determinants of entrepreneurial behaviour among small enterprise owners in eldoret municipality, Kenya
(2011-08-16) Korir, Michael Kirwa; Kibas, Peter; Thoruwa, T. F. N.
The role of culture and social factors on the development of entrepreneurship is an emerging theme of research but results remain ubiquitous. Others have concluded that an individualistic culture fosters entrepreneurial behaviour while collectivist culture retards them. Others have argued that culture and socialisation process does not have any bearing on entrepreneurial behaviour. Besides, empirical studies that forge these propositions in an African setting, and specifically in Kenya, are scanty. This study examined cultural and social determinants of entrepreneurial behaviour among smallscale entrepreneurs within Eldoret Municipality in Kenya. It anchored on hypotheses that relate several cultural and social factors to the development of entrepreneurial mindset, motives and orientations as components of entrepreneurial behaviour process. The study employed a triangulation of descriptive and explanatory designs. Using cluster, simple random and systematic sampling techniques with the support of key informant interviews, a cross-sectional survey of 387 entrepreneurs running small businesses within Eldoret municipality was conducted. A self-administered questionnaire was used to collect primary data. Data was analysed using descriptive and inferential statistical tools. Specifically, factor analysis was used to validate and construct indices for the preconceived variables while Analysis of Variance and Structural Equation Modelling in the form of Path analysis were utilised to test hypotheses. Theory testing results show that the Hofstede's cultural value dimensions remains conceptually valid, albeit explaining a small proportion of variance (38.4%); thus suggesting some extension. Similarly, the 'Push-Pull' theory of entrepreneurial motives (57.37% of variance explained) and the Entrepreneurial Orientations model (48.0% of variance explained) remain valid in explaining entrepreneurial behaviour in an African developing country context. Results of hypothesis testing indicate that entrepreneurs from the six referenced ethnic groups exhibited significant (P<.05) varying degrees in business start-up motives variables and propensity to employ, but generally displayed similar post start-up orientations. Other significant (p<.05) sociomicro factors that were found to have moderating effects on entrepreneurial behaviour include level of education, gender, religion, parental occupation, age and marital status. Paradoxically, findings from Structural Equation Models show a positive but not significant causal relationship between cultural value dimensions and business start-up motives but a negative causal relationship between cultural value dimension and post start-up orientations. Specifically, cultural value dimensions of Collectivism, Long-term orientation and Orthodoxy appear to impede entrepreneurial behaviour. While the presence of role models was found to have a positive effect on all the stages of entrepreneurial behaviour process, the bonding dimensions of social capital seem to impede its development. These findings hold implications for the intensification of entrepreneurship education and training, mooting of entrepreneurship policies that target the youth, retiring and women groups, more involvement of religious organisation in entrepreneurship development, and a call for cultural and social transformation, if the goal of building an entrepreneurial economy and culture in Kenya is to be realised. Future research should explore more linkages between culture and entrepreneurship using longitudinal research designs. The validation of measurement tools and use of case approach in exploring effects of role models is also open for further research
The data envelopment analysis and stochastic frontier approaches to the measurement of hospital efficiency in Kenya
(2013-07-25) Korir, J.K.
After independence in 1963, the government of Kenya pledged to fight diseases, ignorance and poverty in the country. The policies that the government has pursued over the years have had a direct impact on health status of Kenyans, as evidenced by a steady reduction in crude death rate, a decline in fertility, and an increase in life expectancy at birth among others. These gains notwithstanding, reversal in health status trend is evident, as the child mortality rate is now on the increase. Despite the massive expansion of health infrastructure after independence, the inability of the government to effectively provide health services became acute in the 1980s due to a sharp increase in demand for health services. The growing lack of resources in the public health sector resulted in a decline in efficiency and quality of government health services. The government responded to these adverse developments by undertaking a bold programme of reforms aimed at improving efficiency at public health facilities. The purpose of this study was to measure efficiency in government hospitals over the period 1995-2000 when the reforms were implemented. In order to achieve this objective, a frontier cost model was estimated using data from a sample of 41 public hospitals in Kenya. This sample size represented about 40% of the public hospitals in the country. Secondary data on recurrent expenditure, number of inpatients and outpatients during the study period augmented the data from the hospital sample. The estimation results showed that all the 41 hospitals recorded steadily increasing efficiency levels during the study period. The amount of recurrent expenditure incurred by the sample hospitals was approximately Ksh 13 billion over the study period, against a background of gross inefficiency in resource use. Had the hospitals operated efficiently over this period, savings in financial terms could have been between Ksh 1 billion and Ksh 1.4 billion. The results showed that the reforms implemented by the Ministry of Health contributed to efficiency improvements in public hospitals. Another finding is that efficiency measures by the two methods employed (data envelopment analysis and stochastic frontier approach) were similar for the overall sample but differed significantly across individual hospitals. The results suggest that the Ministry of Health should put more effort to reducing inefficiency in service provision, as this can be done. Moreover, there is need for the Ministry to maintain a database on the inputs used by each hospital and services it provides, to facilitate measurement of efficiency on an annual basis, as efficiency information is key to the upgrading of service quality.
The Determinants of Adoption of Information and Communication Technology by Small and Medium Enterprises within the Health Sector in Nairobi, Kenya
(Kenyatta University, 2010) Muathe, Stephen M. A.
Small and Medium Enterprises (SMEs) playa very important role in the economy in terms of wealth creation and provision of employment opportunities. However, competition from more established firms poses a great challenge to their existence. With the adoption of Information and Communication Technologies (lCTs), it was envisaged that SMEs would compete more effectively and efficiently in both domestic and international markets, but recent research portrays a gloomy picture about the adoption of ICT by SMEs. Most SMEs have failed to adopt ICT citing significant impediments. Since literature on ICT adoption by SMEs in Kenya is limited and inconsistent, this study examined the effects of various contextual factors such as individual factors, organizational factors, technological factors, and the external environment on the adoption of ICT by health-related SMEs in Kenya. A cross-sectional descriptive survey design was used. The target population was 17 health-related SMEs. In addition, 172 end - users were sampled using purposive and simple random sampling techniques. Both primary and secondary data were used. Primary data was collected using a semi-structured questionnaire and an interview guide. Secondary data was collected through review of records and documents. Descriptive statistics were used to summarize the properties of the mass data. The Logit model was used to predict the potential effects on the determinants of ICT adoption by SMEs. Open-ended questions were analysed by capturing the common themes, categorizing them, and drawing conclusions from the findings. The research findings showed that age, CEO's ICT knowledge, quality of ICT systems, information intensity, ICT specialization, organizational readiness, relative advantage, government policies on ICT applications, and pressure from suppliers and patients were the main determinants of ICT adoption. The study concludes that, for the health related- SMEs to cope with the dynamics of the global competition and move Kenya towards middle level income country as envisaged in the Vision 2030, the above nine determinants must be addressed. The study, therefore, Recommends that government should develop a differentiated ICT policy arid incorporate compulsory training in computer applications in the national school curriculum. In addition, SMEs should invest in quality systems that are functioning and also technically usable. They should set a mechanism for monitoring the changes in technological innovations as the electronic marketplace evolves. Finally, SMEs should adopt ICT within a participatory plan.
Determinants of demand for family planning services in city slums in Kenya
(2011-07-25) Okech, Chrispinus Timothy
The Kenya government, in collaboration with other stakeholders involved in the provision of family planning services, have put in place various strategies and policies to increase uptake of family planning services. These are aimed at increasing contraceptive prevalence rate (CPR), reduction in both total fertility rate (TFR) and unmet need for family planning services. Despite the various strategies and policies, total fertility rate still remains high at 4.6 percent, while CPR and unmet need for family planning are estimated at 46 percent and 24 percent, respectively. The purpose of the study was therefore to analyze the determinants of demand for family planning services in city slums in Kenya. To realize this objective, a survey design was adopted. The target population constituted women in city slums in Kenya, who were identified through multistage random sampling. Primary data were collected from the women using a structured interview schedule. A fact sheet was used to summarize the data collected before it was cleaned, coded and edited for completeness and accuracy. A binomial logic model was developed and estimated using two-step regression procedures. The study revealed low usage of family planning services, among women in the city slums attributed to various factors. These include in order of significance, partner's approval, religious background of the woman the woman's knowledge about family planning services and friendliness of the staff administering the services. Other factors included quality of the services, proximity to the facility, while the woman's income level was the least significant factor. The studv recommends that to increase the use of family planning services among women n slums, promotion of family planning education and activities at the household level should be carried out, the activities of community based distributors should be revived and enhanced. Formation of lobby groups to enhance cultural change, awareness creation and counseling, integrating family planning services with HIV/AIDS have also been recommended.
Determinants of Scheme Design in Occupational Defined Contribution Schemes in Kenya
(Kenyatta University, 2015-01-22) Tari, Justus
Defined contribution schemes involve no promises about the size of the benefits and no risk to the employer. The risk of ending up with low or no benefits falls entirely on the scheme members. It is necessary therefore, that determinants of scheme design are carefully considered in establishment and review of defined contribution schemes to deliver adequate benefits to members. Based on modern portfolio and the life cycle theories, the study investigated the key determinants of scheme design in occupational defined contribution schemes in Kenya. First, the study evaluated employer related determinants of scheme design; secondly, it evaluated trustee related determinants of scheme design and lastly it evaluated regulatory related determinants of scheme design. Primary data were collected using a questionnaire administered to scheme administrators in the sample. Descriptive statistics were used to profile respondents, describe sample characteristics and a logistic econometric model was applied to evaluate the determinants of scheme design. Overall, the majority of retirement benefits schemes in Kenya were designed as pension schemes and contributory. The average employee and employer contribution rates were 11.96 and 14.84 percent respectively, with most schemes reporting the basis of contribution as the basic salary. However, most schemes did not allow additional voluntary contributions to augment member benefits. Most schemes had undergone some form of design change since inception, with the overriding change being conversion from defined benefit to defined contribution. Most schemes had a bigger proportion of their investments in treasury bonds and bills, with a majority not setting any investment performance targets. In addition most schemes did not target any level of pensions to their members and paid pension through purchase of annuities. In addition, most scheme administrators reported that their scheme design was poor. The study showed that the key employer related determinants of scheme design were the employer‘s budgetary constraint and recognition of the length of service of scheme members, while the key trustee related determinant of scheme design was investment strategy. The results also revealed that the key regulatory related determinant of scheme design was the existence of a separate public pillar. Gender was important but was mostly associated with poor scheme designs. From the findings, it was recommended that employers should consider pensionable salary, budget constraint, length of service, retirement age and occupation in designing schemes while trustees should consider investment returns, target pension, charges by service providers, annuity rates and the investment strategy. Lastly regulatory agencies should consider incentives for participation, taxation rules, existence of a separate pillar and gender in the design of occupational defined contribution schemes. This would guarantee members a reasonable standard of living after retirement.
The determinants of tax Revenue in Kenya
(2011-12-16) Wawire, N. H. W.
Several studies have been undertaken on the responsiveness of tax revenues to changes in GDP in Kenya. These studies have found a positive relationship between tax revenues and GDP. However, the studies omit some key determinants of tax revenues, such as the nature of the tax system and institutional, demographic and structural features of the economy. Due to this omission, the estimated income elasticities of tax revenues are unreliable for planning purposes, a situation that might be responsible for recurring budget deficits. The main objective of this study was to examine the composition of tax revenues and properly estimate income elasticities of various taxes. The study is important because its results can be used to design pro-growth tax policies and implement tax changes that are equity enhancing. The thesis uses Paul Samuelson's (1955) fundamental general equilibrium analysis of the public sector to derive its main results. In my framework, the demand function for the public good is derived from a constrained model of utility-maximization. In the same vein, tax revenues are taken as functions of household incomes, which paves the way for the estimation of Engel curves for public goods. The study finds that tax elasticities for total taxes, income taxes, and excise duties with respect to GDP are less than unity. Elasticities of excise duties with respect to the volume of imports and volume of trade are less than unity, as is the elasticity of import duty with respect to the volume of trade. On the other hand, growth elasticities for direct taxes and sales taxes are all greater than one. The elasticity of the direct tax revenue with respect to GDP is found to be unitary. The estimation results show that total GDP elasticities of tax revenues are less than the elesticities with respect to monetary GDP, suggesting the existence of an underground economy in Kenya over the period analyzed. The study shows that population growth has adverse effects on tax revenues. It is found that tax revenues respond with substantial lags to changes in tax determinants and that tax revenues are sensitive to unusual circumstances. The study concludes that Kenya's tax revenues are only moderately responsive to changes in their determinants. There is therefore the challenge of creating flexibility in the tax system so that tax revenues can increase rapidly as the economy grows.

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