| dc.description.abstract | Manufacturing is the comer stone of Kenya's industrial sector. The sector has
been inward - oriented, with limited technological progress. Historical experience
shows that there is positive correlation between industrial development and
economic growth. The Government has put a lot of emphasis on industrialization,
but the sector has not been dynamic enough to function as an engine of growth for
the economy. Indeed the sector continues to experience a sluggish growth, which
is a matter of concern.
Based on the existing literature and the available data, this paper provides a
descriptive and empirical analysis of the factors that determine demand for locally
manufactured goods. The main focus of the study was to identify the determinants
of domestic demand for locally manufactured goods and to estimate their relative
influence on this demand. Regression analysis is used to specify, estimate and to
evaluate the statistical reliability of the model. The study used the Ordinary Least
Squares (OLS) technique to estimate the variables' parameters.
The study findings are that income price of locally manufactured goods, price of
imported manufactured goods and government expenditure has significant impact
on demand for the locally manufactured goods. It is therefore vital to adopt
policies that enhance per capita income level and offer investment incentives
which promote competitiveness of local goods. Government expenditure should be
geared towards creating conducive environment for the manufacturing sector to
thrive. Similarly it should encourage development of all the other sectors,
particularly the agricultural sector since manufacturing sector is linked to all these
other sectors. | en |
