Entrepreneurial Behavior, Social and Economic Institutions and Performance of Micro and Small Livestock Enterprises in North Eastern Region, Kenya

Abstract

The motivation for this study arose from the fact that, whereas 73% of Kenya is arid and semiarid lands, suitable only for livestock rearing where the livestock sector contributes 12% to the national GDP and whereas, according to Kenya Veterinary Vaccines Production Institute, about 10 million Kenyans derive their livelihood from livestock, no academic study was done in the past to help understand the performance of the firms in the livestock sector. The study has responded to the question: Are the MSEs in the livestock sector thriving or merely surviving? The main objective of this study was to examine the effects of entrepreneurial behavior, social and economic institutions on the performance of micro and small enterprises in the livestock sector in North Eastern Kenya. The study was based on the interviews of the owners of 191 MSEs out of a population of 305 firms, resulting in a response rate of 63 percent. The study was set within the context of rural environment with highly constrained access to financial, human resources and social capital and comparatively with weak socio-economic institutional framework. The study is based on several empirical studies, literature review, conceptual framework and is presented in eight chapters. The theoretical anchorages of the study are bricolage, effectuation, resource based view (RBV) and institutional theories. As the literature review chapter three demonstrate, these theories are most popular research lenses and were appropriate for this study. Bricolage and effectuation theories of entrepreneurship, unlike causation, help to provide acceptable explanation for how entrepreneurs successfully overcome the challenges of resources constraints in a highly capital scarce settings. The role of institutions and resources in firm performance also help to provide a well-grounded explanation as to why some firms perform better than others or some enterprises fail altogether. Methodologically, the research design of the study was a crosssectional survey method combined with case studies. The method of data collection was pretested, assisted, self-completion questionnaire method, using Likert scale and qualitative perception measures of performance to determine the dependent variable which was the performance of the MSEs. Descriptive statistics, factor analysis, multiple regressions and ANOVA were used to perform data analyses. The main findings of this study were that a number of aspects of entrepreneurial behaviour dimensions directly, positively affected performance of the MSEs. Some have negative effects and yet others have weak relationship with firm performance. The specific findings from the study are: one; business interests, achievement need or motivation contributed significantly to performance of MSEs. Two; business growth motivation is explained by previous growth, asset size, motivation, attitudes, opportunity recognition and institutional business climate. However, the study finds that overall entrepreneurial behaviour has moderate positive effects on performance. Similarly, social and economic institutions have on the average strong positive effects on the relationship between entrepreneurial behaviour and performance of the MSEs. Further, the study found that the combined effects of entrepreneurial behaviour, social and economic institutions are greater than their individual effects, R2=78.9%. The study experienced limitations regarding the wide geographical scope of the region, security challenges during the data collection stage and obtaining the cooperation of the owners of the MSEs. However, these constraints were managed. The study suggest further research on micro, small and medium size enterprises in the livestock sector in North Eastern Kenya based on individual theories of institutions, culture, geography and bricolage and not integrated as this study has done. Such research will help shed more light on the performance of MSEs in the livestock sector using new entrepreneurship research lens. The study has theoretical, managerial and policy implications in the concerned livestock sector in Kenya.