| dc.description.abstract | Export processing zones have increasingly been used by governments in developing
countries as a policy tool for development. Both developed and developing and have
turned to export processing zones in a bid to attract foreign direct investment and trade
through export oriented growth. Experience has shown that export processing zones can
be successful in earning foreign exchange, creating employment and in developing export
competitiveness. While countries like China, Dominican Republic, United Arab Emirates
and Singapore have succeeded in their zones, zones established in some developing
countries have failed to attract substantial investment. In sub Saharan Africa, with the
exception of Mauritius, countries like Botswana, Cameroon, Ghana, Kenya, Madagascar
and Malawi are among those that have failed to attract substantial foreign direct
investment through export processing zones. The objective of this research was to
determine whether Porter's theory of Competitive Advantage of Nations can explain the
difference in competitiveness between Kenya and United Arab Emirates export
processmg zones. Porter's theory states that nations can only create a sustainable
competitive advantage if they acquire four broad attributes, which he called the
determinants of competitive advantage, that create the environment in which local firms
compete and in so doing create a competitive advantage. The four determinants are factor
conditions, firm strategy, structure and rivalry, demand conditions, related and supporting
industries and form the diamond of competitive advantage. Porter's theory predicts that a
country with a more robust diamond will be more competitive.
The research, a comparative case study research design, examined the difference in
competitiveness by analyzing each determinant separately. Each determinant was broken
down into different categories. Each category within the determinant was further broken
down into its constituent elements. As an example, one of the factor conditions categories
was infrastructure. Infrastructure was further broken down into its constituent elements of
road infrastructure, railroad infrastructure, port infrastructure and so on. Secondary data
on the global ranking and score of competitiveness of each element was obtained from
World Economic Forum Global competitiveness survey report for both Kenya and United
Arab Emirates. These were then tabulated for each category of determinant and
competitiveness for the countries compared to determine which was more competitive. A summary table was then constructed for each determinant and by examining the number
of categories a country was more competitive, an overall leader in each determinant was
determined. Where there was an apparent tie, the actual element scores within categories
were tallied to determine the country that was more competitive.
The research findings showed that United Arab Emirates was more competitive in all
four determinants and had therefore a more robust diamond than Kenya, confirming the
prediction of Porter's Theory of Competitive Advantage of the Nations. The research
showed that Kenya had competitive weaknesses mainly in its institutions, infrastructure,
health, knowledge resources in terms of secondary and tertiary enrollment and
macroeconomic stability. Institutions had many categories such as property and
intellectual rights, judicial independence and efficiency of legal framework, bureaucracy,
business ethics, crime and corruption. The role of Kenya's government is to strengthen
Kenya's diamond by addressing the subject areas. By so doing it will increase its global
competitiveness, instill investor confidence and attract more foreign direct investment in
Kenya export processing zones.
UAE has a more robust diamond than Kenya but it can enhance its competitiveness by
addressing areas its areas of weakness which are health, knowledge resources in
enrollment of primary, secondary and tertiary education, innovation and also address time
required to start. Because of UAE financial strength, it does procure latest technology
from advanced nations. UAE government must however work to develop its education
system and areas of research if wants to improve its global competitiveness. | en |
