Effect of Electronic Commerce on Output and Total Factor Productivity in Kenya

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dc.contributor.authorKithinji, Elvis Mwenda
dc.date.accessioned2020-10-13T08:52:19Z
dc.date.available2020-10-13T08:52:19Z
dc.date.issued2019-12
dc.descriptionEffect of Electronic Commerce on Output and Total Factor Productivity in Kenya A Research Project Submitted to the Department of Applied Economics in Partial Fulfillment of the Requirements for the Award of Master of Economics (International Trade and Finance) Degree of Kenyatta University November 2019en_US
dc.description.abstractKenya seeks to transform into a middle-income country by 2030 with target annual growth rates of 10 percent. However, this target has not been realized since growth rates are under 10 percent while 36 percent of the population lives below the poverty line. While this has been interpreted as an underperformance by various studies, this study attempted to show that the economic growth witnessed in the years 2007 to 2018 pointed to a resilient economy characterized by an average steady growth rate of 5.4 percent despite the deterioration of the global economic outlook. This resilience coincided with the adoption e-commerce, increased output in absolute values and an emphasis of Information Communication Technology as a key industry under the economic pillar of the Kenya Vision 2030. More importantly, this period also saw the emergence of unique payment gateways particularly mobile payment gateways which this study argued for and used as a key enabler for E-commerce among other enablers. E-commerce activities increase efficiency and ease of doing business by reducing costs and barriers of operation, which are important for achieving economic growth. This, therefore, renders e-commerce critical to economic growth in transition countries such as Kenya. This study focused on Kenya because of a key e-commerce enabler in the form of mobile payments services. Various studies showed positive findings on the effect of e-commerce on output and total factor productivity. However, a majority of the studies focused more on regions outside Africa and Kenya. This called for an investigation into the effect of e-commerce on output and total factor productivity in Kenya. The objectives of the study were, to investigate the contributions of e-commerce to economic output and the effect of e-commerce on total factor productivity in Kenya. To achieve the objectives, the study developed a framework following the neoclassical and endogenous growth theories. The study used quarterly time-series data from the period 2007 to 2018. All relevant time-series tests were performed. To address both objectives, the study applied Ordinary Least Squares regression models. The results suggested that e-commerce had a positive effect on output. However, the coefficient was not statistically significant. This is perhaps because of low adoption by enterprises and market dominance by one mobile payment platform. The effect of ecommerce on Total Factor Productivity was positive when considering the value of mobile payments while that of card payments was negative. Therefore, for Kenya to experience episodes of output growth and an increase in total factor there should be continued investments towards ecommerce in terms of capital and mobile payments technology.en_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/20594
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectElectronic Commerceen_US
dc.subjectOutputen_US
dc.subjectTotal Factoren_US
dc.subjectKenyaen_US
dc.titleEffect of Electronic Commerce on Output and Total Factor Productivity in Kenyaen_US
dc.typeThesisen_US
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