| dc.description.abstract | This study aims at determining whether the Export Processing Zones (EPZs) are "new
industrial spaces" in Kenya by analyzing their evolutionary, structural and operational
characteristics. The concern here being to determine whether there are similarities and or
differences amongst the EPZ firms in terms of their structural characteristics, linkage
capabilities and marketing strategies. The regulation approach and the product cycle model
were employed in understanding the evolutionary and operational characteristics of the EPZs
in Kenya.
The findings of this study are based on information gathered from a sample of 25 EPZ firms
and 250 employees. The technique employed in acquiring the samples for employees was
stratified random sampling. Primary data was gathered by use of standardized questionnaires,
while secondary data was obtained from government publications and Export Processing
Zones Authority (EPZA) reports. In the analysis and presentation of the field data both
qualitative and quantitative techniques were employed. In assessing the linkages between EPZ
firms and the host economy, Corden's (1974) enclave approach was employed. It was used
descriptively in assessing the linkage capabilities between the EPZs and the host economy.
Finally, common factor analysis was utilized in determining the significant survival strategies
utilized by EPZ firms in the competitive world market economy.
The findings indicate that like the new industrial spaces in North America and Western
Europe, EPZ firms in Kenya exhibit similar structural and operational characteristics. For
instance most EPZ firms are foreign owned, depend on labor-intensive technology, rely on
imported inputs, are export oriented, manufacture mature products and most of them are either
small or medium size firms. The EPZ firms in Kenya utilize the same survival strategies in a
competitive world market economy. The most significant strategies utilized are production of
quality goods, use of cheap non-unionized labor, standardization of production processes,
locational mobility and reliance on EPZ incentives.
The findings also indicate that the contribution of EPZs on the host economy has not been very
significant. For instance, employment creation in the EPZs has been very low as evidenced in
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the small numbers of people employed in the firms. Backward and forward linkages have not
been achieved due to over-dependence of the EPZ firms on foreign inputs and external
markets. Technological transfer by EPZ firms has not been very significant because of the
substantial protection by patents, the low technological level of labor-intensive production and
lack of skilled labor. Therefore, the enclave nature of EPZs has denied the host economy the
anticipated benefits expected from EPZ firms.
This study recommends that in order for Kenya to achieve integrated national development
through strategies such as EPZs and to transform them into viable industrial development
tools, there is need to: select industries with strong backward and forward linkages; invest in
promotion programs to encourage both marketing and production skills between EPZs and the
host economy; encourage local manufacturers to produce quality goods to be able to supply
the EPZ firms; and engage in continuous assessments to determine and evaluate the success of
the EPZ program. | en |
