Kenya’s Manufactured Export Performance and Competitiveness: an Empirical Investigation

Abstract

Kenya has had several trade policies and reforms through export promotion initiatives to promote trade. This paper sought to identify factors that affect export performance and competitiveness in Kenya for the period between 1980-2011 using time series annual data. The study used Export values as dependent variable and Terms of Trade, Trade openness, Real Effective Exchange Rate, World Gross Domestic Product, Gross Domestic Product and Foreign Direct Investment net inflows as explanatory variables. The results indicate that Trade openness, Gross Domestic Product, Real Effective Exchange Rate, Terms of Trade and World Gross Domestic Product are significant determinants of export performance and competitiveness. It is important to note that Kenya’s export values increased during the periods of regional integration so there is need for Kenya to strengthen regional ties especially the EAC and COMESA in order to increase export volumes which translate into increased trade through competition leading export growth and performance