Entrepreneurial Skills and Growth of Micro and Small Farm input Enterprises in Kenya

Abstract

Micro and small enterprises are important drivers of most economies across the world. Kenya Vision 2030 envisages the importance of farm input MSEs due to the crucial role they play in agricultural food value-chain as they supply farmers with necessary farm inputs for food production and economic growth. Several policies and programs have been put in place to promote the growth of farm input MSEs in Kenya. However, despite these efforts, most of these enterprises continue to struggle with growth problems. Entrepreneurial skills such as leadership, communication, innovativeness, and networking are considered important in enhancing the growth of enterprises. This study sought to examine the influence of entrepreneurial skills on the growth of micro and small farm input enterprises in Kenya. Specifically, the study was guided by five objectives including leadership skills, innovative skills, communication skills, networking skills, and the moderating effect of the entrepreneur’s education status on the relationship between entrepreneurial skills and the growth of micro and small farm input enterprises. The study was supported by skills leadership theory, Schumpeter’s innovation theory, transactional communication theory, social exchange theory, human capital theory, and Greiner's Model of Organizational Growth. The study adopted a positivist research philosophy and descriptive survey design. The target population was 4,931 micro and small farm input enterprises registered by the Agricultural Market Trust of Kenya. The unit of analysis was the Farm input MSEs whereas the unit of observation was the farm input MSEs’ owners/managers. A stratified random sampling technique was used to select the sample. For the sampling procedure, the farm input MSEs were stratified according to counties in Kenya. From the strata, the simple random technique was applied to arrive at a sample size of 370 respondents. A structured questionnaire, observation guide, and document analysis were used for data collection. A Pilot test was conducted to check for the validity and reliability of data collection instruments. Diagnostic tests on normality, multi-collinearity, autocorrelation, and heteroscedasticity were also tested. Descriptive and inferential statistics were used in the data analysis through Statistical Package for Social Sciences (SPSS) version 23. Descriptive statistics were summarized into frequencies, percentages, and measures of central tendency and presented using figures, tables, and pie charts. Multiple linear regression analysis was done to establish the relationships between the study variables. The findings indicated that leadership skills, communication skills, innovative skills, and networking skills had a positive and significant influence on the growth of farm input MSEs in Kenya. Moreover, there was a statistically significant and positive moderating effect of entrepreneur’s education status on the relationship between entrepreneurial skills and the growth of farm input MSEs in Kenya. The study concluded that entrepreneurial skills significantly and positively contribute to the increase in the growth of farm input MSEs in Kenya. After moderation, innovative skills had the strongest relationship with farm input MSEs growth in Kenya, followed by leadership skills, networking skills, and lastly communication skills. Based on the findings, the study recommended that the farm input MSEs’ owners should strengthen their entrepreneurial skills through training. The study findings make a significant contribution to policy, theory, and practice in the field of entrepreneurship. Particularly, the study informs on the influence of entrepreneurial skills in determining growth of farm input MSEs in Kenya.