Analysis of Antecedents of Performance of Small and Medium Enterprises in Manufacturing Sector Post-Covid-19 in Kenya

Abstract

Research conducted all over the world highlights the fundamental idea that the manufacturing sector represents a cornerstone of many national economies. The manufacturing sector contributes to GDP, employment creation, stimulating development of other sectors, economic growth, revenue generation, wealth creation and poverty alleviation. The main objective of this study was an analysis of antecedents (Entrepreneurial orientation, Entrepreneurial networking, Organizational resources and Innovation culture) of performance of Small and Medium Enterprises (SMEs) in manufacturing sector post-Covid-19 in Kenya. The specific objectives were to examine entrepreneurial orientation, establish the influence of entrepreneurial networking, examine the influence of organizational resources, determine the influence of innovation culture, and assess the moderating influence of regulatory framework on the performance of small and medium enterprises in manufacturing sector post-Covid-19 in Kenya. The study was based on various theories that include the Economic Theory of Entreprenuership, Social Network Theory, Resource-Based Entreprenuership Theory, and Entreprenuership Innovation Theory.The research employed a cross-sectional research design, with a target population of 716 manufacturing organizations, and a sample size of 250 manufacturing organizations was drawn from the 13 sub-sectors in the manufacturing sector as classified in the Kenya Association of Manufacturing sector as classified in the Kenya Association of Manufacturing (KAM) directory for 2021-2022 period. Descriptive and inferential statistics, correlation and regression analysis, were used for data analysis. Data was collected from primary sources using a semi-structured questionnaire and various secondary sources. The tool was pretested for validity and reliability using content, construct, face validity, and internal Cronbach Alpha consistency. The collected data was analyzed using both quantitative and qualitative data analysis methods. An estimation model was predicted using multiple regression analysis. The analysis was done with the assistance of Statistical Package for the Social Sciences (SPSS) version 26. The study found that performance of manufacturing SMEs in Kenya was influenced positively and significantly by entrepreneurial orientation, entrepreneurial networking, organizational resources and innovation culture. The regulatory framework significantly moderated the relationship between independent variables and performance of manufacturing SMEs in Kenya. The study recommends that manufacturing SMEs should adopt proactive entrepreneurial strategies. The study further recommends that manufacturing SMEs should strengthen networking opportunities; and foster innovation-driven culture to enhance performance.