IDEAS home Printed from https://ideas.repec.org/a/ibn/ijefaa/v16y2024i7p13.html

Export Intensity and Total Factor Productivity in Kenya’s Manufacturing Sector

Author

Listed:
  • Dorothy Kimolo
  • Jennifer Njaramba
  • Laban Chesang

Abstract

Kenya has adopted an export-led manufacturing industrialization strategy as envisaged by many policy documents including the Kenya Vision 2030 which aimed at increasing the manufacturing share in Gross Domestic Product to 15 per cent by 2022. The share of manufactured exports in all exports was targeted at 60 per cent by 2022 as per the National Exports Development and Promotion Strategy. However, manufacturing sector’s productivity has been declining as demonstrated by its economic contribution which has averaged around 10 per cent from 2007 to 2022 and has persistently declined from 12.79 per cent in 2007 to 7.83 per cent in 2022 pointing towards premature deindustrialization. Besides, from 2007 to 2022, the share of total exports made up of manufactured goods averaged 33 per cent. The study aimed to estimate firms’ total factor productivity (TFP) and examine the impact of export activity on firms’ TFP in Kenya’s manufacturing industry. Firm TFP was computed utilizing the Levinsohn and Petrin (2003) technique. The study employed Propensity Score Matching and a dynamic panel model estimated using the generalized methods of moments technique, to analyze the effect of exporting on firms TFP. Export intensity, labor productivity and management experience had positive effects on firm’s TFP. However, firm size and capital intensity had negative effects on TFP. Based on the study findings, the government should emphasize on export promotion policies as well as adoption of labor intensive technologies in Kenya’s manufacturing sector.

Suggested Citation

  • Dorothy Kimolo & Jennifer Njaramba & Laban Chesang, 2024. "Export Intensity and Total Factor Productivity in Kenya’s Manufacturing Sector," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(7), pages 1-13, July.
    • Handle: RePEc:ibn:ijefaa:v:16:y:2024:i:7:p:13
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/ijef/article/download/0/0/50232/54372
    Download Restriction: no
    File URL: https://ccsenet.org/journal/index.php/ijef/article/view/0/50232
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Haidar, Jamal Ibrahim, 2012. "Trade and productivity: Self-selection or learning-by-exporting in India," Economic Modelling, Elsevier, vol. 29(5), pages 1766-1773.
    2. Youssouf Kiendrebeogo, 2020. "Learning by exporting or self-selection into exporting?," Middle East Development Journal, Taylor & Francis Journals, vol. 12(2), pages 304-325, July.
    3. Stehen Esaku & Waldo Krugell, 2020. "Trade Liberalization and Productivity Growth: A Firm-level Analysis from Kenya," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 12(4), pages 439-460, December.
    4. Bresnahan, Lauren & Coxhead, Ian & Foltz, Jeremy & Mogues, Tewodaj, 2016. "Does Freer Trade Really Lead to Productivity Growth? Evidence from Africa," World Development, Elsevier, vol. 86(C), pages 18-29.
    5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    6. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Borice Augustin Ngounou & Honoré Tekam Oumbe & Bruno Emmanuel Ongo Nkoa & Edmond Noubissi Domguia, 2024. "Inclusive growth in the face of increasing urbanization: What experience for African countries?," Review of Development Economics, Wiley Blackwell, vol. 28(1), pages 34-70, February.
    2. Chris Belmert Milindi & Roula Inglesi-Lotz, 2023. "Impact of technological progress on carbon emissions in different country income groups," Energy & Environment, , vol. 34(5), pages 1348-1382, August.
    3. Voxi Heinrich Amavilah & Antonio Rodríguez Andrés, 2024. "Knowledge Economy and the Economic Performance of African Countries: A Seemingly Unrelated and Recursive Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 110-143, March.
    4. Gebregziabher, Fiseha & Niño-Zarazúa, Miguel, 2014. "Social spending and aggregate welfare in developing and transition economies," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    5. Vivarelli, Marco & Piva, Mariacristina & Tani, Massimiliano, 2025. "The role of business visits in fostering R&D investment," GLO Discussion Paper Series 1586, Global Labor Organization (GLO).
    6. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    7. Saima Nawaz & M. Idrees Khawaja, 2016. "Fiscal Policy, Institutions And Growth: New Insights," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1251-1278, December.
    8. Fiseha Gebregziabher & Miguel Niño-Zarazúa, 2014. "Social Spending and Aggregate Welfare in Developing and Transition Economies," WIDER Working Paper Series wp-2014-082, World Institute for Development Economic Research (UNU-WIDER).
    9. Ali Öztürk, 2024. "The Effect of Efficiency and Cost Changes in Labor Factor on Physical Capital Investments: Dynamic Panel Data Analysis," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, issue 86, pages 18-25, July.
    10. Osvaldo Lagares, 2016. "Capital, Economic Growth and Relative Income Differences in Latin America," Discussion Papers 16/03, Department of Economics, University of York.
    11. Andrés Rodríguez-Pose & Marco Di Cataldo, 2015. "Quality of government and innovative performance in the regions of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 673-706.
    12. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20 [Dealing with Structural Change. Annual Report 2019/20]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920.
    13. Sakiru Adebola Solarin & Mufutau Opeyemi Bello, 2024. "Modelling labour productivity and the role of research intensity in 129 years: evidence from a new dynamic instrumental variable estimation approach," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(3), pages 2619-2646, June.
    14. Nor-Eddine Oumansour & M'ssiyah Sakhr, 2024. "Innovation and employment: Estimation on a panel of countries using the software Stata," French Stata Users' Group Meetings 2024 34, Stata Users Group.
    15. Aipime, Michelle, 2026. "Institutional Quality and Human Capital as Drivers of Non-Linear Export Complexity: Global Evidence," MPRA Paper 128954, University Library of Munich, Germany.
    16. Daniel Ştefan Armeanu & Georgeta Vintilă & Ştefan Cristian Gherghina, 2017. "Empirical Study towards the Drivers of Sustainable Economic Growth in EU-28 Countries," Sustainability, MDPI, vol. 10(1), pages 1-22, December.
    17. Alhassan Abdul-Wakeel Karakara & Evans Osabuohien, 2020. "ICT adoption, competition and innovation of informal firms in West Africa: a comparative study of Ghana and Nigeria," Journal of Enterprising Communities: People and Places in the Global Economy, Emerald Group Publishing Limited, vol. 14(3), pages 397-414, June.
    18. Catherine Baumont, 1995. "Urban economics and endogenous dynamics in regional growth [Economies d'agglomération et dynamique endogène de croissance des régions]," Working Papers hal-01527237, HAL.
    19. Asongu, Simplice & Boateng, Agyenim & Akamavi, Raphael, 2016. "Mobile Phone Innovation and Inclusive Human Development: Evidence from Sub-Saharan Africa," MPRA Paper 75046, University Library of Munich, Germany.
    20. Białek-Jaworska Anna & Dobroszek Justyna, 2019. "R&D Expenditure and the Role of Scientists," Financial Sciences. Nauki o Finansach, Sciendo, vol. 24(2), pages 1-16, June.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ijefaa:v:16:y:2024:i:7:p:13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.