Perceived Value of Investment Promotion Incentives, Organizational Characteristics, Macro-marketing Environment and Performance of Firms in Export Processing Zones in Kenya

Abstract

The broad objective of this study was to establish the influence of perceived value of investment promotion incentives, organizational characteristics and macro-marketing environment on performance of firms in the export processing zones (EPZ) in Kenya. The study had six specific objectives to determine both direct and indirect relationships among variables. A conceptual model was developed, and from it, six hypotheses were formulated. The study was cross-sectional survey where all operating EPZ firms in Kenya formed the population. Secondary data were obtained from various reports and bulletins. Primary data were collected from the study population using structured self-administered questionnaire. The unit of measurement of the study was the firm. Reliability test was undertaken using dimension reduction with Cronbach’s alpha of 0.60 as the cut-off point. Pre-testing (pilot) exercise was carried out to determine content validity, and necessary corrections and adjustments made to the instrument. Analysis of data was done using various measures and tests through descriptive and inferential statistics. Simple and multiple linear regression, and correlation analyses were used to test the six hypotheses. The relationships between and the influence of the variables were determined, inferences made and conclusions drawn. Results indicated that perceived value of investment promotion incentives had significant influence on firm performance. The tests also established that there was strong positive relationship between organizational characteristics and firm performance. Equally strong positive relationship was observed between macromarketing environment and firm performance. Macro-marketing environment was found to have significant moderating influence between perceived value of investment promotion incentives and firm performance. It was further established that organizational characteristics had significant moderating influence on the relationship between perceived value of investment promotion incentives and firm performance. Finally, the study revealed that perceived value of investment promotion incentives, organizational characteristics and macro-marketing environment had significant joint influence on firm performance. However, the contribution of macro-marketing environment to the joint effect was negligible. The study has contributed to theory development, policy and marketing practice to the extent that it made recommendations and offered suggestions on areas of future research. The study had some limitations mainly caused by the scope of work. Only top management was targeted leaving out other employees. Sampling across the organizational hierarchy could ensure a larger and more inclusive sample. Furthermore, as a study variable, organizational characteristics was constructed with limited aspects of culture, structure and design namely age, size and ownership. However, the limitation did not have an adverse effect on the results. Future studies could address these limitations by adaptation to the sampling and instrument designs, which may include longitudinal studies.