| dc.description.abstract | Kenya's horticultural industry earns the country much
foreign exchange and horticultural products are set to overtake
coffee and tea as the country's leading agricultural export
commodities. The industry, however, is beset by a number of
constraints and challenges that may hinder the full realization
of its potential. Literature on the industry identifies these as
including limited air-cargo space; high cost of packaging; lack
of proper handling, pre-cooling and cold storage facilities;
high cost of production; strong competition from other
horticultural producers; and seasonality of foreign demand. Despite the identification of the factors that influence
exports of horticultural products from Kenya by various
researchers, no study has attempted an empirical analysis of
their impact. In recognition of the strategic importance of this
industry, particularly in its foreign exchange earning
potential, and the limitations of the existing literature on the
export performance of the industry, this study does this by
specifying a semi-log-linear econometric model and estimates it
using Ordinary Least Squares (OLS). This is aimed at identifying
the statistically significant determinants of the export
performance of Kenya's horticultural industry. Diagnostic tests
have been carried out on the estimated model verify the
reliability of the estimated model. Results of the empirical analysis indicate that foreign
income, air-cargo space availability, the real exchange rate
and the concessions under Lome Conventions all positively
influence the volume of horticultural exports from Kenya.
However, the Lome Conventions' variable was not statistically
significant at the 5% level of significance. As Kenya's policy makers have no way of influencing foreign
incomes, policies aimed at increasing the volume of
horticultural exports from the country should be those that
increase the real exchange rate and air-cargo space
availability. Due to -da t a limitations a number of important
variables such as packaging cost and quality; handling, precooling,
and cold storage facilities; processing ; and so on,
were not incorporated in the model used in the study. For this
reason, further work on horticultural exports should attempt to
incorporate some of these variables. | en |
