MBA Theses and Dissertations (2018)

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    The Effect of oil prices on the USD KES exchange rate in Kenya, 2000-2017
    (Strathmore University, 2018) Njuguna, Irene Wairimu
    This study sought to investigate the effect of oil prices on the USDKES exchange rate in Kenya over the study period 2000-2017. The study uses Brent crude oil as the benchmark for oil prices and the USDKES currency as the exchange rate. Secondary data was obtained from the Central Bank of Kenya and the United States Energy Information Administration. The study employed Unit Root Tests, Engle-Granger and Johansen tests for cointegration, Granger Causality test, and Vector Autoregressive Models (VAR) models used to assess for linear dependencies between the variables. The study objectives were to examine the short-run and long-run comovement of oil prices and the exchange rate. Using cointegration tests, the study found that there was no counteraction between the oil price and the USDKES exchange rate implying that there is no long-run cointegrating relationship between the oil price and the exchange rate. Granger causality tests found no causality between oil price and the exchange rate. V AR tests indicated that oil price accounts for a marginal proportion of exchange rate movements. The study thus finds that whereas theoretical and empirical literature has provided evidence for a long-run relationship between oil price and the exchange rate, the same is not the case for Kenya. These findings have important implications for policymakers, business entities, and financial market players who may typically infer that oil price has an effect on the exchange rate. For policymakers such as the Central Bank, price stability actions will be less reactive oil price movements; Business entities and Financial market players would adjust their forecasting models in line with the findings.
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    Evaluating the role of investment climate in shaping firms' decisions to enter county markets: a case study of Busia and Narok counties
    (Strathmore University, 2018) Munavu, Michael Mutemi
    Kenya has been implementing, since 2013, a devolved governance structure, based on 47 county units. This new county system potentially offers opportunities, but also poses constraints to the business sector. To maximize these opportunities, firms need to understand the range of benefits and constraints to engage strategically with the county structures. However, few studies have previously documented the investment climate offered by county governments. The most prominent of these is the recent World Bank Sub National "Doing Business" Survey (SNDBS) of 2016, which is a quantitative assessment of infrastructure, regulation and policy that are supportive of starting and maintaining enterprises. There is need, however, to determine whether (i) these quantitative measures do indeed determine the motivation to initiate new businesses in counties; or (ii) are considered key determinants for business owners in selecting counties in which to establish themselves. This study aimed at undertaking this analysis from the perspective of firms that have recently been established in selected counties in Kenya. The study aimed to (i) establish the perceptions of firms in selected counties about the ideal investment climate at the county level (ii) assess the importance of investment climate factors in shaping strategic decision making processes (iii) recommend how firms should strategically position themselves to benefit from the devolved county structure. The study results identified priority investment climate areas from the perspective of firms. The most important of these are: getting connected to electricity, ease in registering businesses, and the nature of the tax regime in the county. The findings of the study point to the fact that firms are considering county performance across various metrics, and how these factors relate to their own planning and decision-making processes. The study recommends that firms and counties should engage more intentionally, to bridge this information asymmetry. This should lead to a more conducive investment climate. The use of County Integrated Development Plans (CIDP) and Investor Forums are a good platform to strengthen these links.
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    Investigating knowledge transfer for entrepreneurship in Kenya's agricultural sector
    (Strathmore University, 2018-01) Ngugi, William Wanyoike
    Agriculture remains the backbone of Kenya's economy. About 80% of the population depends directly or indirectly on agriculture for both food and employment. Despite this, the small scale farmers have largely remained stagnant in productivity and tended to focus on subsistence farming. This study investigated the knowledge transfer predictors for entrepreneurship in Kenya's Agricultural Sector. The objectives were, to first determine the knowledge and skills gap in the agricultural sector in Kenya, to determine the relationship between these knowledge gaps and successful knowledge transfer (productivity) in the agricultural sector in Kenya and to find out the moderating effect of hindrances on the relationship between knowledge gaps and successful knowledge transfer in the agricultural sector in Kenya. The knowledge predictors identified have shown that with an effective knowledge transfer from various existing agricultural and research institutions as well as learning institutions, it is possible for the farmers to not only increase their production, but it is also possible to turn their farming activities into commercial enterprises, small, medium and large farming enterprises. The initial stage of the study used exploratory design followed by descriptive design. Data was collected through self – administered questionnaires. The questionnaires were structured to minimize variability. The sample set was clustered and convenience sampling applied resulting in a sample size of 60 respondents (30 small-scale farmers and 30 large scale farmers from Laikipia, Kiambu and Nakuru counties, purposively sampled). The data was analyzed using descriptive statistics and inferential statistics in particular regression analysis. The study established that a relationship exist between knowledge gaps and knowledge transfer. Five predictors of knowledge transfer were identified. The most significant predictors of knowledge transfer according to their impact factor were: skills transfer from the large scale farmers to small scale farmers, access to research centers (KARl) and extension service providers like Syngeta EA, Osho chemicals, Amiran, Bayer EA, Twiga Chemicals, Kenya Seeds Company and others, access to information on agriculture relayed via TV and radio, education of the farmers and the courses pursued at college level. The study concludes that effective knowledge transfer is tenable through such mediums like the government agricultural officers, mass media and agricultural learning institutions which will turn the farming activities of small-scale farmers to commercial enterprises. Since implementing the predictors of knowledge transfer would entail a financial cost, a key recommendation to other academicians is to determine the return on investment in knowledge transfer, by putting into practice the theoretical aspects identified.
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    An analysis of the effect of crowdfunding platforms in enhancing the financing sources for micro, small and medium enterprises (MSMEs) in Kenya
    (Strathmore University, 2018) Onyango, Linda
    The Micro, Small and Medium Enterprise (MSME) sector plays a significant role in the Kenyan economy, offering opportunities for employment and innovation. However, there exist a financing gap due to limited personal finances, credit, grants, equity and other sources of finance that subsequently limits MSMEs access to funding. This further inhibits many entrepreneurs from sustaining and growing their enterprises. The crowdfunding platform phenomenon was first adopted in the developed world and has grown exponentially over the years with many entrepreneurs employing crowdfunding platforms to raise capital for the enterprises’ financial needs. Unfortunately, African countries lag behind in the adoption of crowdfunding with very few locally established crowdfunding platforms and a general lack of awareness of the use of crowdfunding platforms as source of finance for entrepreneurs’. The purpose of this study was to analyse the financing gap that exists in MSMEs in Kenya and the role that crowdfunding platforms play in enhancing their financing opportunities. This study was exploratory and it used both primary and secondary data in answering the research questions. Primary data was collected by targeting a population of 30 MSMEs that have accessed financing from the 48 crowdfunding platforms accessible to Kenyan.The study was able to achieve a response rate of 96.7%. Secondary data was collected from the World Bank and Central Bank of Kenya and used to analyse the average MSME financing gap at a national level. From the primary data, the average success rates of four different types of crowdfunding platforms was determined as percentage of amounts raised from the platform versus the target amounts the entrepreneurs’ were seeking from these platforms. The average success rate for each platform was then applied to national average financing gap to provide a recommendation on which platform could be an ideal contributor in narrowing the financing gap for MSMEs in Kenya. The study findings reveal that the mean success rate is highest for lending platforms (100%) followed by reward platforms (87%, donation platforms (46%) and finally equity platform (0%).From the secondary data the average financing gap is USD 7,545 per registered but underserved MSMEs. The extent to which the various challenges faced by MSMEs in accessing funding such as value and size of MSME network, human effort required, compatible payment systems, due diligence process required was analysed and discussed depending on the platform type. The highest contribution to the national average financing gap evidently came from the lending platforms and was the recommended platform as long as an entrepreneur is able to pass the due diligence required in order to access funds from these platforms. In the arena of academia, scholars can contribute towards this end by undertaking more studies to fill the knowledge gap particularly on the size of financing gap facing MSMEs in Kenya especially from a demand side.
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    The Influence of strategic alliances on competitiveness of internationally ranked law firms in Kenya
    (Strathmore University, 2018) Macharia, Gachini
    Law firms, just like other forms of for-profit legal entities, operate with the aim of maximizing profits. Law firms have used various strategies to achieve this goal, in particular and the focus of this study, entering into strategic alliances with foreign law firms with the intention of entering into new markets, increasing market power, acquisition of skills and for strategic renewal. As a result of adopting these strategic alliances, certain law firms have improved their competitiveness against other players in the market for legal services. Law firms in Kenya are also adopting the strategy of entering into strategic alliances with foreign law firms to enhance their competitiveness. The study evaluated the types of strategic alliances that law firms in Kenya are entering into and analyzed how these alliances influence their competitiveness. The research was guided by the resource based theory because of the use of strategic alliances to access valuable resources from the other firms. A quantitative research design was used through a questionnaire to collect primary data while secondary data in the form of the position held by the various law firms in global legal ranking publications was also collected. A purposive sampling technique was used in which the targeted population for the study was a total of 16 law firms listed on the following global legal ranking websites: IFLR1000; Chambers and Partners; and Legal 500. Considering the size of the population, data was collected from the entire population. Descriptive as well as inferential statistics were used to analyze the data. In particular, to test the strength of relationships between variables, a Spearman’s rank correlation coefficient (Spearman’s rho) was carried out. The study found that law firms in Kenya are entering into Ad Hoc Referral, Best Friends and Swiss Verein forms of strategic alliances with foreign law firms. Of the three strategic alliance models, the Swiss Verein model had the greatest influence in bringing about a positive increase in competitiveness and access to new markets and opportunities is the key resource driving competitiveness.. The study suggests that future research considers using a longitudinal research design and using financial measures of competitiveness.