Social Capital and Performance of Manufacturing MSMEs in Kenya
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Date
2022-09
Authors
Kaberia, Salome Kanini
Bula, Hannah O.
Muathe, Stephen M. A.
Journal Title
Journal ISSN
Volume Title
Publisher
Hrpub
Abstract
ustained growth and development of
economies is mainly attributed to the manufacturing
sector, and is often the differentiator between developed
and developing countries. In Kenya, the sector has played
a crucial role, with a contribution of 10% to gross
domestic product for the duration from 2008 to 2014.
Statistics show that in 2017, 2018 and 2019, the
contribution deteriorated to 8.4%, 7.7% and 7.54%
respectively, which implies possible deindustrialization.
The government’s goal of achieving a robust
manufacturing sector through Big Four Agenda may not
be fruitful if this trend continues. Informed by these trends,
the study sought to establish the connection between
social capital and firm performance among the micro,
small and medium manufacturing enterprises. Keys
among the existing theories applied in the study are social
capital theory and behavioral theory of the firm. The
sample size was 384 licensed manufacturing businesses
operating within Nairobi City County, derived from a
population of 61,931. The study applied descriptive and
explanatory research designs. Primary data was collected,
and analysis was done using descriptive and inferential
statistics. The outcomes showed that relational and
cognitive social capital had a positive and significant
effect on performance of micro, small and medium
manufacturing ventures, whereas structural social capital
was noted to have a significant effect. This study
recommends that the firms’ management taps into
additional and diverse networks to drive innovation, and
subsequently create a competitive edge for their firms
Description
Article
Keywords
Social Capital, Firm Performance, MSME, Manufacturing
Citation
Kaberia Salome Kanini, Hannah O. Bula, Stephen M. A. Muathe , "Social Capital and Performance of Manufacturing MSMEs in Kenya," Advances in Economics and Business, Vol. 10, No. 4, pp. 59 - 71, 2022. DOI: 10.13189/aeb.2022.100401.