Infrastructure, Institutional Quality, and the Intensity of Kenyan Firm Exports

Abstract

This research explained export intensity in Kenya using infrastructural development and institutional quality, among other factors. The research applied linear panel regression model. The research utilized panel data drawn from the World Bank Enterprise Surveys of 2013 and 2018, and employed both the fixed effects and the random effects models. The Hausman test results led to the adoption of the random effects model. This research concluded that when faced with obstacles related to transport, a firm’s export intensity rose; website ownership reduced export intensity, and; age of the firm increased export. Export intensity declined in tax administration. This paper recommends streamlining tax administration as a first step towards increasing export intensity. Streamlining tax administration could be realized through for example through reducing “unnecessary” paperwork, reducing compliance checks, and making the tax policy as simple as possible to understand. To control corruption, crackdown on corrupted officials by setting up of punitive measures against corrupt government officials. To address the negative effect of certain infrastructural factors on exports such as water shortage public-private partnerships ought to be pursued in addressing water shortage problems such as drilling of boreholes and the construction of dams that would serve as a long-term solution.