Political and Regulatory Environment Nexus with Growth of Export Oriented Entrepreneurship. A Survey of Performance of Selected Exporting Firms in Kenya

Abstract

Kenya’s endeavor to develop an export led growth of its economic development has been ongoing for decades. It is documented in Sessional Paper No. 1 of 1986 on Economic Management for Renewed Growth, Vision 2030 and more recently in its 2017 to 2022 national growth policy dubbed the Big 4 Agenda. This has involved a paradigm shift in trade policy, from an inward to an outward approach that forays trade as a key contributor to economic growth target rate of 10% per year. This notwithstanding exporting firms are yet to record regional or global competitive levels that would envisaged in such policy agenda. So this research thus sought to determine the effect of the specific political and regulatory frameworks on strategic entrepreneurship of Kenya’s exporting firms. It was based onan extraction of GEM model adaption by UNCTAD2004. The study applied the survey research design to collect data from n=174 sampled export firms registered with Export Promotion Council (EPC) - Kenya. The findings were that political forcescontributed to 12.9% of the predicted outcome ofgrowth of export-oriented entrepreneurship with independent variables as political-economic conditions, local politics environment, and international political environment. While regulatory environment, and local political environment were significantly affecting growth of exportoriented entrepreneurship, international political environment effect was not significant (p=0.05).The study therefore recommends that the Government in its intent to support the Big 4 Agenda through export oriented economic focus, it must address the need to ensure that the regulatory environment must be supportive and the local political environment should be stable through countering threats such as terrorism, violent political activism, and other forms of political tensions. Kenya’s national entrepreneurship policy should specifically address political and regulatory environment that ensure favorable environment necessary for export oriented firms for its agenda for its economic growth to become competitively export driven.