Determinants of Ease of Doing Business Among the Logistics Firms in Kenya

Abstract

This aim of the study was to determine the factors that contribute to ease of doing business among logistics firms. Based on the factors suggested by World Bank (2020), the study analysed factors such as business location, accessing financing, support to daily operations and business environment security in the Kenyan context. Primary data was adopted for the study and was obtained using questionnaires administered to senior personnel in operations management in the logistics firms in Kenya. The study selected 30% of the 915 registered logistics firms; hence the target sample size was 275. The sample was determined through simple random sampling with 152 fully completed questionnaires which obtained a 52.27% response rate. The data was analysed using regression technique to model relationships between the dependent and independent variables. The descriptive analysis revealed that logistics firms were generally unhappy with the situation facing their businesses. The inferential statistics established a positive, strong effect of factors; business location, access to financing, support to daily business operations and business environment security on ease of doing business. The coefficients showed that business location negatively affected ease of doing business while access to financing, support to daily business operations and business environment security had a positive influence on ease of doing business. Conclusions of the study indicated need for improvement of ease of doing business in Kenya by enhancing access to financing, support to daily business operations and business environment security. The study recommends that entrepreneurs should conduct ample due diligence in their feasibility studies before starting business in such unstable business environments like a developing market context. The study also recommends that future researchers can study multiple sectors through a comparative analysis of the industries to establish whether the results are stable in the multiple sectors or not. Also, inclusion of more factors that influence ease of doing business and using elimination techniques of structural equation modeling to extract those factors that actually influence ease of doing business could be beneficial. Categorizing influencing aspects of ease of doing business in various sectors and regions can assist those starting businesses in specific regions and sectors to be specifically guided.