Volume 4, Issue 1, March 2019, Page: 31-37
Firm Characteristics and Export Intensity in Kenyan Manufacturing Firms: An Empirical Analysis
Kipkurui Josphat Kipsaat, School of Economics, University of Nairobi, Nairobi, Kenya
Received: Feb. 21, 2019;       Accepted: Apr. 8, 2019;       Published: May 20, 2019
DOI: 10.11648/j.jbed.20190401.15      View  109      Downloads  24
Abstract
This paper examines the determinants of export intensity in Kenyan manufacturing firms. We use data from the World Bank enterprise survey 2013 and from it examine how firm characteristics explain export intensity. We use the Ordinary Least Squares estimation technique and Heckman sample selection model to estimate this relationship. The Heckman model is estimated in order to control for possible Sample Selection bias as export intensity is only observable in firms that make the decision to export. The findings show that innovation and certification are major determinants to export intensity as a unit change in these variables would result to a change in export intensity by 0.4747 units and 0.3259 respectively. Foreign firms are also found to export more as compared to domestic firms; the results show that the foreign owned firms export 0.5803 more units than domestic firms. This paper recommends that Kenyan firms should adopt internationally recognized certification standards in order for them to be more competitive in the international market and should embrace innovation by introducing new products and making improvements to their existing products; this can be achieved by investing more in research and development. These measures will increase firm export intensity leading to an overall increase in the country’s volume of exports leading to an improved balance of trade, a significant factor to overall economic growth. This paper therefore provides valuable information on how Kenyan manufacturing firms can increase the proportion of revenue received from engaging in international trade.
Keywords
Export Intensity, Export Propensity, Firm Performance
To cite this article
Kipkurui Josphat Kipsaat, Firm Characteristics and Export Intensity in Kenyan Manufacturing Firms: An Empirical Analysis, Journal of Business and Economic Development. Vol. 4, No. 1, 2019, pp. 31-37. doi: 10.11648/j.jbed.20190401.15
Copyright
Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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