Organizational Characteristics, Firm Resources and Export Performance of SMMEs in Nairobi City County, Kenya

The purpose of this study was to determine the influence of organizational characteristics on the relationship between firm resources and the export performance of SMEs in Nairobi County, Kenya. In order to test the hypothesis that, organizational characteristics have an influence on the relationship between firm resources and export performance, a regression analysis was carried out to determine the extent of the influence. The study was based on descriptive survey design where 265 out of 853 firms informed the sample through a survey questionnaire. Descriptive statistics and ANOVA guided the analysis and further scrutiny of the data involved regression analysis. A questionnaire return rate of 89.1 percent was achieved and the findings revealed that organizational characteristics had a significant moderating influence on the relationship between firm resources and export performance. It was established that education level determined the ability of respondents to comprehend policy and operational imperatives and this had an influence on performance improvements. It was established that age of the firm, or the period of existence had a positive contribution in terms of experience in manufacturing and exporting, an experience of more than three years accounted for 75 percent of the firms that were surveyed. Major decisions with regard to exporting were highly influenced by ownership, for instance venture into new export markets and respective growth of revenue. Based on the study findings, stakeholders both at the National and County Governments need to formulate laws and policies which support SMMEs development to enhance their management, efficient manufacturing and exporting processes. Introduction There is growing consensus among scholars that exporting is a highly flexible and costeffective means of gaining entry into new foreign markets. Exporting requires minimal resource commitments when compared to other foreign market entry modes such as licensing and foreign direct investment. The progress of exports by a nation has a positive effect on the overall economic development such as on individual companies (Tesfoqm & Lutz, 2006). Exporting initiatives boost productivity, enhance domestic economy and help tackle inequality and poverty problems (Koskal, 2008; Karadeiz & Gocer, 2007). Secondly, exporting provides greater incentives for Small and Medium enterprises to invest in Research and Development, and innovation (Ganotakis & Love, 2012). Thirdly, Small and Medium Enterprises in the export cycle (SMEs) expose the firm to superior competences and emerging technology that can consequently drive growth. Finally, exporting via foreign direct investment could be used as a stepping-stone for new international development. This study is anchored on Firm Industrialization Theory, other theories, for instance the Resource Based View (RBV), the Industrial organization Theory and Porter‟s Theory on competitive advantage are also discussed in the study. The resource -firm relationship is anchored in RBV (Penrose, 1959; Wernerfelt, 1984). The RBV postulates that resources possessed by an organization are the primary source of performance and competitive advantage. Porter's competitive advantage principle refers to understanding the ARTICLE INFO ARTICLE INFO Received 19, July, 2020 Received in Revised Form 2 August, 2020 Accepted 10 August, 2020 Published online 14 August, 2020