THE JOINT EFFECT OF STRATEGIC ALLIANCE, REGIONAL INTEGRATION AND MACRO ENVIRONMENT ON THE PERFORMANCE OF KENYAN MANUFACTURING FIRMS IN THE EAST AFRICAN COMMUNITY MARKET

Abstract

The study sought to establish the joint effect of strategic alliance, regional integration and macro environment on the performance of Kenyan manufacturing firms in the East African Community market. The study was anchored on resource dependency theory, Resource Based Theory, theory of integration and the Open system theory. The positivism philosophical paradigm and a cross sectional descriptive survey design adopted guided the study. The population of the study was 160 Kenyan manufacturing firms in the EAC market. Primary data was collected using a semi-structured questionnaire. A response rate of 81% was realized. Secondary data was collected from financial statements of the respective firms. Data was analysed using descriptive and inferential statistics. Hypotheses were tested using both simple and multivariate regression analysis while Baron and Kenny (1986) model of stepwise regression analysis were used to test for moderating effects. The findings indicated that there is a statistically significant positive joint influence of strategic alliance, regional integration and macro environment on the performance of Kenyan manufacturing firms in the East African Community market and the joint effect was greater than the influence of each variable individually. Future research directions include a replication of study in a longitudinal approach while using path analysis or structural equation models and consideration of other sectors, firm characteristics and resource constraints. The results of this study will serve as guide to document that the level and type of alliances used in the Kenyan manufacturing firms in the EAC market will determine their performance.