Firm’s Characteristics and Productivity in Kenya

Abstract

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