THE MODERATING INFLUENCE OF REGIONAL INTEGRATION ON STRATEGIC ALLIANCES AND PERFORMANCE OF KENYAN MANUFACTURING FIRMS IN THE EAST AFRICAN COMMUNITY MARKET

Abstract

The specific objective of this study was to determine the influence of regionalintegration on the relationship between strategic alliances and performance ofKenyan manufacturing firms in the East African Community market. The studywas anchored on Resource dependency theory, theory of integration and the Opensystem theory. The positivism philosophical paradigm and a cross sectionaldescriptive survey design guided the study. The population of the study was 160Kenyan manufacturing firms in the EAC market. Primary data was collectedusing a semi-structured questionnaire. A response rate of 81.88% was realized.Secondary data was collected from financial statements of the respective firms.Data was analysed using descriptive and inferential statistics. Hypotheses wastested using Baron and Kenny model of stepwise regression analysis to test formoderating effects. From the research findings, regional integration was found tohave a statistically significant moderating influence on the relationship betweenstrategic alliance and firm performance. These results are consistent withpropositions in the resource dependence and open system theories. In a regionalintegration framework, firms depend on each other through strategic alliances togain competitive advantages as envisaged in resource dependency theory. Thestudy recommends that policy makers in EAC partner states should encouragecomplementarity and competitive advantage approaches while promoting skillstransfer and information sharing amongst the firms.