The Determinants of Foreign Direct Investment in Kenya: an Empirical Investigation (1976-2016)
Abstract
Corporate Social Responsibility (CSR) is gaining momentum in Kenya as
organisations are recognizing the vital role it plays on firms’ performance. This is so
mostly with the large corporations who are using it as a corporate positioning tool and
have continued to enjoy high profits from positive market perception due to CSR.
Whereas CSR is taken to have positive effect on financial performance, those opposed
to it argue that CSR involves the undertaking of a set of actions which are potentially
cost increasing. Whereas studies on effect of CSR on financial performance are
intensive, the findings have been contradicting, concentrating on large firms and
leaving SMEs out. This study sought to determine the effect of CSR on financial
performance of small and medium sized enterprises in Kenya using the top 100
SMEs. The study used descriptive survey research design with data being obtained
from secondary sources which were the published financial statements, Chairman’s
Statement and notes to the financial statements for five years period from 2009 to
2013. The data obtained was analyzed using SPSS version 21 with multiple
regressions being used to show the relationship between dependent and independent
variables. The significance of the results was determined using Z tests, ANOVA and
coefficient of correlation and determination. The study found CSR has significant
positive effect on financial performance of small and medium sized enterprises in
Kenya. The study also found that size of SME has significant effect on profitability
where bigger SMEs have better financial performance than small ones. SME industry
was also found to affect financial performance with SMEs in service industry having
highest financial performance followed by trading and manufacturing being least
profitable as measured by return on assets. The study recommends for more
investment in CSR as a way of boosting SMEs profitability
Citation
Master of Business Administration (MBA) Degree, School of Business, University of NairobiPublisher
University of Nairobi