Economic factors affecting the performance of paper industry in Kenya
Date
2023
Authors
Kogi, V. M.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The Paper industry in Kenya has declined over the years despite having a high growth potential. There are many factors stunting the growth of the sector which was once flourishing. This study was undertaken to establish the economic factors affecting the performance of paper industry in Kenya. The specific objectives of the study were to determine the effect of taxation, import logistics, production cost and technological changes on the performance of the paper industry in Kenya. The study aggregated the variables of import duty and taxation, import logistics, production costs, and technology. There was an assessment of which factors affect the paper industry the most and quantify the outcome. The study adopted a descriptive design in its approach. Descriptive statistics helped to develop a better understanding of the data collection in the research investigation and simplify large amounts of data sensibly. The target population for the study was the paper manufacturing firms and those enterprises involved in the paper industry value chain. The study targeted the enterprises in Nairobi region and its outskirts. The study targeted a total population of 81 and achieved 61, representing a 75% response rate. The heads of businesses of the enterprises were targeted in the study. The study revealed that only production costs were found to have a positive and significant effect on company performance. This is a result of a general global decline in the supply of wood bi-products, of which the paper commodity falls under this category and which impacts on availability of the materials, and their affordability. The study revealed that taxation and technology had a negative and insignificant impact, while imports logistics had a positive and insignificant impact on company’s performance. Taxes are statutory payments and are mandatory, meaning businesses do not have leeway to negotiate amounts payable or when to pay. Trading is not significantly deterred by higher transport costs and Kenyan companies have no option than to import all their required raw material. Hence companies will still import paper whether there is an increase in import logistics costs or not. Size of the firm and scale of production are the key determinants of a firm’s performance and not technology. To enhance the performance of the paper industry in Kenya, the recommendation from the study is to have interventions to lower production costs. This research focused on specific factors that can impact business performance i.e., taxes, import logistics, production costs, and technology. However, there could be other intervening factors, e.g., market accessibility, social factors, and legislation, among others, that can affect business performance. Future research can include other intervening factors to assess their effect.
Description
Full- text thesis
Keywords
Citation
Kogi, V. M. (2023). Economic factors affecting the performance of paper industry in Kenya [Strathmore University]. http://hdl.handle.net/11071/13437