Agglomeration and performance of retail microenterprises in Kenya

Abstract

The specific objectives of the project were to determine the relationship between agglomeration and performance of retail micro-enterprises, the drivers that lead to the agglomeration of retail micro-enterprises and the challenges encountered by retail microenterprises due to agglomeration. The data was collected by use of self-administered questionnaires and was analysed by descriptive analysis, correlation analysis and odds ratios to measure association between the exposures and the outcomes. The relationships established were between agglomeration, firm age, firm size, technology adoption and management skills versus profit and growth of the businesses. The odds ratios compared the performance outcomes based on respective baseline outcomes. The study revealed positive correlation in that agglomeration of retail micro-enterprises led to knowledge spillover and heightened demand. Availability of support services and amenities and colocation of other similar competing businesses were highlighted as critical in choice of location by micro-enterprises. It was recommended that policies be implemented to create enabling environments for micro-enterprises based on agglomeration considerations.